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Fundamental analysis: DiamondRock Hospitality Company (DRH)

Awarener score: 5.0

Conclusion

Note: All scores range from 1 (worst) to 10 (best). Conclusions are updated daily with closing stock prices and new reported quarterly financial statements.

Revenue score: 5.0

• Business has been growing at a very good pace. It's been more than average in relation to peer companies.
• DiamondRock Hospitality Company business varies frequently, ups and downs are normal. It's risky. It looks worse than most rivals.

Margins score: 3.5

• DRH profit margins -on goods and services sold- are usually meagre. They stand bottom tier against rival companies.
• Business profit on sales tends to be meagre. It's weak when measured against competitors.
• Profits on sales made -available to repay debt and purchase properties- are usually meagre. They remain a disappointment compared to peers.
• Earnings -before income taxes and interests on loans taken- tend to be very poor in relation to total revenues. They're still bottom tier against similar companies.
• Profits -before income taxes- are usually very poor considering total sales, and remain substantially worse when measured against rivals.
• Total net profit tends to be very poor when confronted to sales. Company stands substantially worse when measured against comparable firms.

Growth score: 1.0

• DiamondRock Hospitality Company couldn't always profit -on goods and services sold- in the past years. It's been a disappointment compared to competitors.
• In recent years, the firm hasn't always been able to profit from operations, which has been bottom tier against comparable firms.
• In past years, the company couldn't always turn a profit -available to repay debt and purchase properties-, which compares last-in-rank when measured against peer enterprises.
• In the previous years, the firm couldn't always make a profit -before income taxes and interests on loans taken-. It turns to be a disappointment compared to similar stocks.
• In past years, at least once the company lost money -before income taxes-. It was bottom tier against rivals.
• In the previous years, the firm had at least a total net loss, and last-in-rank when measured against peer companies.
• The company lost money at least once in the past years. It's been a disappointment compared to industry peers.

Miscellaneous score: 1.0

• DRH had still to pay income taxes, even though in recent past years mostly lost money. It's been bottom tier against peers.
• The company does not report R&D expenses. It's meaningless to measure in relation to competitors.
• We have insufficient data to estimate how effective is research and development effort. It stands unknown against rival companies.

Profitability score: 4.8

• DiamondRock Hospitality Company usually gets hardly sufficient returns on the resources it controls. It proves last-in-rank when measured against peer firms.
• The company normally gets low proceeds -on the resources directly invested in the business-. They remain a disappointment compared to similar companies.
• Profitability -in relation to owned resources- is usually modest. It ranks weak when measured against competitors.
• In the past, got barely sufficient returns -on the tangible resources it controls-. This metric is usually related to the industry in which operates and combines profitability versus reinvestment needs. It's last-in-rank when measured against comparable enterprises.

Usage of Funds score: 2.8

• DRH on average doesn't generate genuine funds, so to buy or replace property, plants and equipment must either burn existing cash or increase debt. It stands last-in-rank when measured against rival firms.
• The company is usually replacing the property, plant, and equipment that gets old, keeping its operating capabilities up to date, which is great when measured against industry peers.
• In the past twelve months it paid very little dividends, considering the current stock price. It came mediocre against competitors.
• In recent years, has greatly cut back dividend payments. It could be enduring difficult times. The company has behaved in a weak position compared to similar firms.
• The company generates very few genuine funds. Dividend payments are usually on borrowed money, which isn't sustainable in the long run. Unless business prospects improve greatly, future payments could be at risk. Sustainability looks bottom tier against comparable companies.
• The company barely enlarges the pool of investors, resulting in slightly more mouths feeding on the pie of profits. It remains close to average when compared to peer enterprises.
• Repurchase effectiveness metric is very complex. Run again in analytical mode if you're interested in a technical explanation. It stands in a very weak position compared to rivals.
• The company generates very few genuine funds. Investor rewards must be paid burning existing cash or by borrowing money, which isn't sustainable in the long run. Unless business prospects improve greatly, stockholder compensation could be at risk. It still looks last-in-rank when measured against competitors.

Balance Sheet score: 5.1

• DiamondRock Hospitality Company has no intangible assets (like brands and goodwill) according to accounting books, which is safest. It happens to be top tier when measured against peer companies.
• The company has somewhat lower short-term resources than short-term obligations. Unless it's part of the business model, there might some liquidity concerns. It turns to be in a very weak position compared to similar firms.
• A significant part of resources controlled were provided for with financial debt. Creditors have almost as many claims on the company as shareholders. It remains worse than most rival firms.
• Controlled resources take time to be turned into cash and equivalents, which is somewhat risky. It looks weak when measured against rivals.
• For every dollar of short-term obligations, the company has almost another of cash and short-term receivables. It's in a very weak position compared to peer firms.
• For every dollar of short-term obligations, the company has few cents of cash and equivalents, which is bottom tier against similar enterprises.
• Usually, sales are on slightly higher than two months credit. It still ranks last-in-rank when measured against peers.
• Normally has no inventories. It comes up as impressive in relation to competitors.
• On average, it takes less than three months from the purchase to charging customers. It happens to be bottom tier against peers.
• On average pays suppliers approximately four months or higher after the purchase. It ranks almost average when measured against industry peers.
• The company charges its customers before it must pay its suppliers, so the more it sales, the more free funds it gets. It's in a weak position compared to similar companies.
• Usual business earnings barely cover net interest expenses. Creditors may be earning money by assuming risks, but hardly shareholders. Situation is risky, profitability must increase, or additional stockholders' funding will eventually be required. It stands worse than most rival firms.
• Business earnings have usually been extremely low when measured against loans taken. Even severely cutting back reinvesting in the business, it could take more than twenty years to repay the obligations. Additional stockholders' funding may be a quicker way, but at the cost of increasing the mouths to feed on the eventual pie of profits. It ranks weak when measured against comparable enterprises.
• Last twelve months revenues were non-significant in relation to fixed assets. The company must improve income to take advantage of used resources. It looks a disappointment compared to similar firms.
• Resource exploitation is slightly low when yearly sales are considered, business volume should be increased. This metric is normally tied to the industry where the firm belongs. It's still slightly better than peer companies.

Valuation score: 5.8

• DiamondRock Hospitality Company looks expensive in relation to profits and financial position. It happens to be below average when measured against competitors.
• Price-to-Tangible-Book-Value is a fairly complex metric. Run again in analytical mode if you're interested in a technical explanation. It remains in a weak position compared to peers.
• In the past twelve months, the company generated some good free funds in relation to the stock price, which stands somewhat worse than similar companies.
• In the past years the company hardly generated enough genuine funds to cover up for its business needs. Business prospects should improve enough to be in a better position to reward investors. It's still substantially worse when measured against industry firms.
• In the past twelve months, the company hasn't rewarded investors, considering both dividends and share on the pie of earnings. It came up lacking compared to peer ventures.
• The company is largely indebted. It should focus on loan repayment before rewarding stockholders. It looks mediocre against similar enterprises.
• Considering the past twelve months, traditional Price-to-Earnings relation might be more or less reasonable, but hardly cheap. It ranks great when measured against peer companies.
• Comparing the current stock price with the past twelve-months revenues gives a roughly two to one relationship. This is an important metric to check its evolution through time, and to compare to industry peers. It looks in a weak position compared to rival firms.
• The relation between the stock price and accounting book value might be more than reasonable. It's important both to check this metric through time and to compare it with rival companies. The company remains somewhat worse than peer firms.
• In the past twelve months, the operating business earned some money when compared to the current stock price and financial position. It happens to be weak when measured against industry peers.
• In an alternate metric of bang for the buck, the company has usually shown a somewhat low earnings power ability when measured against the current stock price and financial position. It's still in a very weak position compared to peer companies.

Total score: 3.6

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Awarener score: 5.0

Conclusion

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