Wyndham Hotels & Resorts, Inc. (NYSE: WH)

Sector: Consumer Cyclical Industry: Lodging CIK: 0001722684
Market Cap 7.74 Bn
P/B 6.38
P/E 49.28
P/S 3.77
ROIC (Qtr) 13.24
Div Yield % 1.95
Rev 1y % (Qtr) -3.54
Total Debt (Qtr) 2.63 Bn
Debt/Equity (Qtr) 4.51
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About

Wyndham Hotels & Resorts, Inc., often recognized by its ticker symbol WH, is a prominent player in the hospitality industry, specializing in hotel franchising. With approximately 9,200 hotels across 24 brands in over 95 countries, Wyndham boasts a significant global presence. Wyndham's primary business activities revolve around the hotel industry, with a focus on franchising. The company operates in various countries and regions, providing a wide range of accommodations to cater to diverse customer needs. Wyndham's portfolio is divided into several...

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Investment thesis

Bull case

  • Strong operating cash flow of 349M provides 2.77x coverage of SG&A expenses 126M, showing efficient operational cost management.
  • Robust free cash flow of 294M exceeds capital expenditure of 55M by 5.35x, indicating strong organic growth funding capability.
  • Robust tangible asset base of 1.29B provides 18.65x coverage of working capital 69M, indicating strong operational backing.
  • Operating cash flow of 349M provides solid 0.79x coverage of current liabilities 439M, showing strong operational health.
  • Free cash flow of 294M provides healthy 0.67x coverage of current liabilities 439M, showing strong operational health.

Bear case

  • Operating cash flow of 349M barely covers its investment activities of (111M), with a coverage ratio of -3.14, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 349M provides thin coverage of dividend payments of (126M) with a -2.77 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Operating cash flow of 349M provides insufficient coverage of deferred revenue obligations of 318M, which is 1.10x, raising concerns about future service delivery capabilities.
  • Operating cash flow of 349M is outpaced by equity issuance of (257M) (-1.36 ratio), indicating concerning reliance on equity markets for funding operations.
  • Debt issuance of 132M significantly exceeds working capital of 69M, which is 1.91x, indicating potentially unsustainable leverage for operational funding.

Segments Breakdown of Revenue (2024)

Product and Service Breakdown of Revenue (2024)

Peer comparison

Companies in the Lodging
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 MAR Marriott International Inc /Md/ 98.24 Bn 37.77 3.75 17.08 Bn
2 HLT Hilton Worldwide Holdings Inc. 74.93 Bn 51.43 6.22 13.09 Bn
3 HTHT H World Group Ltd 16.57 Bn 29.82 4.76 5.22 Bn
4 H Hyatt Hotels Corp 16.03 Bn -308.35 2.26 4.56 Bn
5 WH Wyndham Hotels & Resorts, Inc. 7.74 Bn 49.28 3.77 2.63 Bn
6 CHH Choice Hotels International Inc /De 6.15 Bn 28.50 5.74 2.03 Bn
7 ATAT Atour Lifestyle Holdings Ltd 5.47 Bn 31.48 5.16 0.23 Bn
8 CVEO Civeo Corp 0.40 Bn -13.95 0.64 0.20 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 2.24 1.88
EV to Cash from Ops. EV/CFO 97.30 35.03
EV to Debt EV to Debt 3.70 3.56
EV to EBIT EV/EBIT 31.69 8.28
EV to EBITDA EV/EBITDA 23.39 15.04
EV to Free Cash Flow [EV/FCF] EV/FCF 194.61 42.92
EV to Market Cap EV to Market Cap 1.26 0.84
EV to Revenue EV/Rev 4.74 0.57
Price to Book Value [P/B] P/B 6.38 -4.94
Price to Earnings [P/E] P/E 49.28 -9.64
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 2.68 1.70
Dividend Payout Ratio % Div Payout % (Qtr) 36.80 7.38
Dividend per Basic Share Div per Share (Qtr) 1.61 0.85
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 41.82 7.54
Interest Coverage Int. cover (Qtr) 4.25 -155,266.31
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -66.67 -4.84
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) -2.78 122.26
Dividend Growth (1y) % Div 1y % (Qtr) 8.05 -2.25
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 29.47 -107.49
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 16.18 3.84
EBIT Growth (1y) % EBIT 1y % (Qtr) 21.84 12.05
EBT Growth (1y) % EBT 1y % (Qtr) 25.72 2.05
EPS Growth (1y) % EPS 1y % (Qtr) 36.99 -10.22
FCF Growth (1y) % FCF 1y % (Qtr) 19.51 -17.22
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 5.83 5.20
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 0.33 0.47
Cash Payout Ratio Cash Payout (Qtr) 0.31 0.13
Cash Ratio Cash Ratio (Qtr) 0.16 0.54
Current Ratio Curr Ratio (Qtr) 1.16 1.20
Debt to Equity Ratio Debt/Equity (Qtr) 4.51 1.44
Interest Cover Ratio Int Coverage (Qtr) 4.25 -155,266.31
Times Interest Earned Times Interest Earned (Qtr) 4.25 -155,266.31
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 44.00 -228.61
EBIT Margin % EBIT Margin % (Qtr) 39.62 -214.73
EBT Margin % EBT Margin % (Qtr) 30.29 -246.57
Gross Margin % Gross Margin % (Qtr) 54.40 36.71
Net Profit Margin % Net Margin % (Qtr) 23.50 -250.50