Intrinsic value of Apple Hospitality REIT - APLE

Previous Close

$17.92

  Intrinsic Value

$4.06

stock screener

  Rating & Target

str. sell

-77%

  Value-price divergence*

-5%

Previous close

$17.92

 
Intrinsic value

$4.06

 
Up/down potential

-77%

 
Rating

str. sell

 
Value-price divergence*

-5%

Our model is not good at valuating stocks of financial companies, such as APLE.

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of APLE stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2016), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 3.9

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2016(a)
   2017
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  15.92
  30.80
  28.22
  25.90
  23.81
  21.93
  20.23
  18.71
  17.34
  16.11
  15.00
  14.00
  13.10
  12.29
  11.56
  10.90
  10.31
  9.78
  9.30
  8.87
  8.49
  8.14
  7.82
  7.54
  7.29
  7.06
  6.85
  6.67
  6.50
  6.35
  6.22
Revenue, $m
  1,041
  1,362
  1,746
  2,198
  2,721
  3,318
  3,989
  4,736
  5,557
  6,452
  7,420
  8,458
  9,566
  10,741
  11,983
  13,289
  14,659
  16,093
  17,590
  19,151
  20,776
  22,466
  24,224
  26,051
  27,949
  29,922
  31,972
  34,103
  36,320
  38,627
  41,027
Variable operating expenses, $m
 
  895
  1,147
  1,444
  1,788
  2,180
  2,621
  3,112
  3,651
  4,239
  4,875
  5,557
  6,285
  7,057
  7,873
  8,731
  9,631
  10,573
  11,557
  12,582
  13,650
  14,760
  15,915
  17,115
  18,362
  19,658
  21,005
  22,406
  23,862
  25,378
  26,955
Fixed operating expenses, $m
 
  180
  185
  190
  194
  199
  204
  209
  214
  220
  225
  231
  237
  243
  249
  255
  261
  268
  274
  281
  288
  296
  303
  311
  318
  326
  334
  343
  351
  360
  369
Total operating expenses, $m
  856
  1,075
  1,332
  1,634
  1,982
  2,379
  2,825
  3,321
  3,865
  4,459
  5,100
  5,788
  6,522
  7,300
  8,122
  8,986
  9,892
  10,841
  11,831
  12,863
  13,938
  15,056
  16,218
  17,426
  18,680
  19,984
  21,339
  22,749
  24,213
  25,738
  27,324
Operating income, $m
  185
  287
  414
  564
  739
  939
  1,164
  1,415
  1,692
  1,993
  2,320
  2,670
  3,044
  3,442
  3,861
  4,303
  4,767
  5,252
  5,759
  6,287
  6,838
  7,410
  8,006
  8,625
  9,268
  9,937
  10,632
  11,355
  12,106
  12,889
  13,703
EBITDA, $m
  333
  480
  662
  877
  1,126
  1,411
  1,731
  2,089
  2,482
  2,911
  3,375
  3,873
  4,404
  4,969
  5,565
  6,193
  6,851
  7,540
  8,260
  9,010
  9,791
  10,604
  11,450
  12,328
  13,242
  14,191
  15,177
  16,203
  17,270
  18,380
  19,536
Interest expense (income), $m
  42
  48
  64
  84
  107
  133
  164
  198
  235
  277
  322
  371
  424
  480
  539
  602
  668
  738
  810
  886
  965
  1,048
  1,133
  1,222
  1,315
  1,411
  1,511
  1,615
  1,723
  1,835
  1,952
Earnings before tax, $m
  145
  238
  349
  480
  632
  806
  1,001
  1,218
  1,456
  1,716
  1,997
  2,299
  2,621
  2,962
  3,322
  3,701
  4,098
  4,514
  4,949
  5,401
  5,872
  6,363
  6,873
  7,403
  7,953
  8,526
  9,121
  9,740
  10,384
  11,054
  11,752
Tax expense, $m
  0
  64
  94
  130
  171
  218
  270
  329
  393
  463
  539
  621
  708
  800
  897
  999
  1,107
  1,219
  1,336
  1,458
  1,586
  1,718
  1,856
  1,999
  2,147
  2,302
  2,463
  2,630
  2,804
  2,985
  3,173
Net income, $m
  145
  174
  255
  351
  462
  588
  731
  889
  1,063
  1,253
  1,458
  1,678
  1,913
  2,162
  2,425
  2,702
  2,992
  3,295
  3,612
  3,943
  4,287
  4,645
  5,017
  5,404
  5,806
  6,224
  6,658
  7,110
  7,580
  8,069
  8,579

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  4,980
  6,515
  8,353
  10,517
  13,021
  15,876
  19,088
  22,660
  26,589
  30,872
  35,501
  40,470
  45,770
  51,393
  57,333
  63,584
  70,141
  77,001
  84,164
  91,632
  99,407
  107,495
  115,905
  124,645
  133,727
  143,165
  152,975
  163,174
  173,781
  184,816
  196,303
Adjusted assets (=assets-cash), $m
  4,980
  6,515
  8,353
  10,517
  13,021
  15,876
  19,088
  22,660
  26,589
  30,872
  35,501
  40,470
  45,770
  51,393
  57,333
  63,584
  70,141
  77,001
  84,164
  91,632
  99,407
  107,495
  115,905
  124,645
  133,727
  143,165
  152,975
  163,174
  173,781
  184,816
  196,303
Revenue / Adjusted assets
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
  0.209
Average production assets, $m
  4,233
  5,536
  7,099
  8,937
  11,065
  13,491
  16,221
  19,256
  22,595
  26,235
  30,169
  34,391
  38,895
  43,674
  48,722
  54,033
  59,605
  65,435
  71,522
  77,868
  84,475
  91,349
  98,495
  105,922
  113,640
  121,661
  129,997
  138,664
  147,678
  157,056
  166,817
Working capital, $m
  0
  353
  452
  569
  705
  859
  1,033
  1,227
  1,439
  1,671
  1,922
  2,191
  2,478
  2,782
  3,104
  3,442
  3,797
  4,168
  4,556
  4,960
  5,381
  5,819
  6,274
  6,747
  7,239
  7,750
  8,281
  8,833
  9,407
  10,004
  10,626
Total debt, $m
  1,338
  1,790
  2,331
  2,967
  3,703
  4,543
  5,487
  6,537
  7,692
  8,951
  10,312
  11,773
  13,331
  14,985
  16,731
  18,569
  20,496
  22,513
  24,619
  26,815
  29,101
  31,479
  33,951
  36,520
  39,191
  41,966
  44,850
  47,848
  50,967
  54,211
  57,588
Total liabilities, $m
  1,463
  1,915
  2,456
  3,092
  3,828
  4,668
  5,612
  6,662
  7,817
  9,076
  10,437
  11,898
  13,456
  15,110
  16,856
  18,694
  20,621
  22,638
  24,744
  26,940
  29,226
  31,604
  34,076
  36,645
  39,316
  42,091
  44,975
  47,973
  51,092
  54,336
  57,713
Total equity, $m
  3,517
  4,600
  5,898
  7,425
  9,193
  11,208
  13,476
  15,998
  18,772
  21,795
  25,064
  28,572
  32,313
  36,284
  40,477
  44,890
  49,519
  54,363
  59,420
  64,692
  70,181
  75,892
  81,829
  87,999
  94,411
  101,075
  108,001
  115,201
  122,689
  130,480
  138,590
Total liabilities and equity, $m
  4,980
  6,515
  8,354
  10,517
  13,021
  15,876
  19,088
  22,660
  26,589
  30,871
  35,501
  40,470
  45,769
  51,394
  57,333
  63,584
  70,140
  77,001
  84,164
  91,632
  99,407
  107,496
  115,905
  124,644
  133,727
  143,166
  152,976
  163,174
  173,781
  184,816
  196,303
Debt-to-equity ratio
  0.380
  0.390
  0.400
  0.400
  0.400
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.410
  0.420
  0.420
  0.420
  0.420
  0.420
  0.420
  0.420
  0.420
Adjusted equity ratio
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706
  0.706

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  145
  174
  255
  351
  462
  588
  731
  889
  1,063
  1,253
  1,458
  1,678
  1,913
  2,162
  2,425
  2,702
  2,992
  3,295
  3,612
  3,943
  4,287
  4,645
  5,017
  5,404
  5,806
  6,224
  6,658
  7,110
  7,580
  8,069
  8,579
Depreciation, amort., depletion, $m
  148
  194
  248
  312
  387
  472
  567
  673
  790
  917
  1,055
  1,202
  1,360
  1,527
  1,704
  1,889
  2,084
  2,288
  2,501
  2,723
  2,954
  3,194
  3,444
  3,704
  3,973
  4,254
  4,545
  4,848
  5,164
  5,491
  5,833
Funds from operations, $m
  359
  368
  503
  663
  848
  1,060
  1,298
  1,562
  1,853
  2,170
  2,513
  2,881
  3,273
  3,689
  4,129
  4,591
  5,076
  5,583
  6,113
  6,665
  7,241
  7,839
  8,461
  9,107
  9,779
  10,478
  11,204
  11,959
  12,744
  13,561
  14,411
Change in working capital, $m
  27
  83
  100
  117
  136
  155
  174
  193
  213
  232
  251
  269
  287
  304
  322
  338
  355
  371
  388
  404
  421
  438
  455
  473
  492
  511
  531
  552
  574
  597
  622
Cash from operations, $m
  332
  285
  404
  546
  713
  905
  1,124
  1,369
  1,640
  1,938
  2,262
  2,612
  2,986
  3,385
  3,807
  4,253
  4,721
  5,212
  5,725
  6,261
  6,820
  7,401
  8,006
  8,634
  9,288
  9,967
  10,673
  11,407
  12,170
  12,963
  13,790
Maintenance CAPEX, $m
  0
  -148
  -194
  -248
  -312
  -387
  -472
  -567
  -673
  -790
  -917
  -1,055
  -1,202
  -1,360
  -1,527
  -1,704
  -1,889
  -2,084
  -2,288
  -2,501
  -2,723
  -2,954
  -3,194
  -3,444
  -3,704
  -3,973
  -4,254
  -4,545
  -4,848
  -5,164
  -5,491
New CAPEX, $m
  -183
  -1,304
  -1,562
  -1,838
  -2,128
  -2,426
  -2,730
  -3,035
  -3,339
  -3,639
  -3,934
  -4,222
  -4,504
  -4,779
  -5,048
  -5,312
  -5,572
  -5,830
  -6,087
  -6,346
  -6,607
  -6,873
  -7,146
  -7,427
  -7,718
  -8,021
  -8,336
  -8,667
  -9,014
  -9,378
  -9,761
Cash from investing activities, $m
  -170
  -1,452
  -1,756
  -2,086
  -2,440
  -2,813
  -3,202
  -3,602
  -4,012
  -4,429
  -4,851
  -5,277
  -5,706
  -6,139
  -6,575
  -7,016
  -7,461
  -7,914
  -8,375
  -8,847
  -9,330
  -9,827
  -10,340
  -10,871
  -11,422
  -11,994
  -12,590
  -13,212
  -13,862
  -14,542
  -15,252
Free cash flow, $m
  162
  -1,167
  -1,352
  -1,541
  -1,727
  -1,908
  -2,078
  -2,233
  -2,372
  -2,491
  -2,589
  -2,665
  -2,720
  -2,754
  -2,768
  -2,763
  -2,740
  -2,702
  -2,650
  -2,585
  -2,510
  -2,426
  -2,335
  -2,237
  -2,134
  -2,027
  -1,918
  -1,806
  -1,692
  -1,578
  -1,463
Issuance/(repayment) of debt, $m
  80
  452
  541
  636
  736
  839
  944
  1,050
  1,155
  1,259
  1,361
  1,461
  1,558
  1,653
  1,746
  1,838
  1,928
  2,017
  2,106
  2,195
  2,286
  2,378
  2,472
  2,570
  2,670
  2,775
  2,884
  2,998
  3,118
  3,244
  3,377
Issuance/(repurchase) of shares, $m
  -9
  908
  1,043
  1,177
  1,306
  1,428
  1,537
  1,633
  1,711
  1,770
  1,810
  1,830
  1,829
  1,808
  1,769
  1,711
  1,637
  1,548
  1,445
  1,329
  1,202
  1,066
  920
  767
  606
  440
  267
  90
  0
  0
  0
Cash from financing (excl. dividends), $m  
  67
  1,360
  1,584
  1,813
  2,042
  2,267
  2,481
  2,683
  2,866
  3,029
  3,171
  3,291
  3,387
  3,461
  3,515
  3,549
  3,565
  3,565
  3,551
  3,524
  3,488
  3,444
  3,392
  3,337
  3,276
  3,215
  3,151
  3,088
  3,118
  3,244
  3,377
Total cash flow (excl. dividends), $m
  229
  194
  231
  272
  315
  359
  404
  449
  494
  539
  582
  625
  667
  707
  747
  786
  825
  863
  901
  939
  978
  1,017
  1,058
  1,099
  1,142
  1,187
  1,234
  1,283
  1,426
  1,666
  1,914
Retained Cash Flow (-), $m
  -870
  -1,083
  -1,298
  -1,527
  -1,768
  -2,016
  -2,268
  -2,522
  -2,774
  -3,023
  -3,268
  -3,508
  -3,742
  -3,970
  -4,194
  -4,413
  -4,629
  -4,843
  -5,057
  -5,272
  -5,489
  -5,710
  -5,937
  -6,170
  -6,412
  -6,664
  -6,926
  -7,200
  -7,488
  -7,791
  -8,110
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  -889
  -1,067
  -1,255
  -1,453
  -1,657
  -1,864
  -2,072
  -2,280
  -2,485
  -2,686
  -2,883
  -3,075
  -3,263
  -3,446
  -3,627
  -3,804
  -3,980
  -4,156
  -4,333
  -4,511
  -4,693
  -4,879
  -5,071
  -5,270
  -5,476
  -5,692
  -5,917
  -6,062
  -6,125
  -6,196
Discount rate, %
 
  6.20
  6.51
  6.84
  7.18
  7.54
  7.91
  8.31
  8.72
  9.16
  9.62
  10.10
  10.60
  11.13
  11.69
  12.28
  12.89
  13.53
  14.21
  14.92
  15.67
  16.45
  17.27
  18.14
  19.04
  20.00
  21.00
  22.05
  23.15
  24.30
  25.52
PV of cash for distribution, $m
 
  -837
  -940
  -1,029
  -1,101
  -1,152
  -1,180
  -1,185
  -1,168
  -1,129
  -1,072
  -1,000
  -918
  -827
  -733
  -639
  -547
  -460
  -380
  -308
  -246
  -192
  -147
  -110
  -80
  -57
  -40
  -27
  -18
  -11
  -7
Current shareholders' claim on cash, %
  100
  81.0
  67.2
  57.0
  49.1
  43.1
  38.3
  34.5
  31.5
  29.0
  27.0
  25.3
  23.9
  22.8
  21.8
  21.0
  20.3
  19.8
  19.3
  18.9
  18.6
  18.4
  18.2
  18.0
  17.9
  17.8
  17.8
  17.8
  17.8
  17.8
  17.8

Apple Hospitality REIT, Inc. is a publicly owned real estate investment trust. It invests in the real estate markets of United States. The firm invests primarily in the lodging industry. It is focused on the acquisition and ownership of income-producing real estate. The firm was formerly known as Apple REIT Nine, Inc. Apple Hospitality REIT, Inc. was founded on November 9, 2007 and is based in Richmond, Virginia. Apple Hospitality REIT, Inc. operates as a subsidiary of Apple REIT Companies.

FINANCIAL RATIOS  of  Apple Hospitality REIT (APLE)

Valuation Ratios
P/E Ratio 27.6
Price to Sales 3.8
Price to Book 1.1
Price to Tangible Book
Price to Cash Flow 12
Price to Free Cash Flow 26.8
Growth Rates
Sales Growth Rate 15.9%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate -38%
Cap. Spend. - 3 Yr. Gr. Rate 43.6%
Financial Strength
Quick Ratio 0
Current Ratio NaN
LT Debt to Equity 30.4%
Total Debt to Equity 38%
Interest Coverage 4
Management Effectiveness
Return On Assets 4.3%
Ret/ On Assets - 3 Yr. Avg. 3.2%
Return On Total Capital 3.4%
Ret/ On T. Cap. - 3 Yr. Avg. 2.3%
Return On Equity 4.7%
Return On Equity - 3 Yr. Avg. 3.1%
Asset Turnover 0.2
Profitability Ratios
Gross Margin 54.9%
Gross Margin - 3 Yr. Avg. 54.6%
EBITDA Margin 32.2%
EBITDA Margin - 3 Yr. Avg. 27.4%
Operating Margin 17.8%
Oper. Margin - 3 Yr. Avg. 12.3%
Pre-Tax Margin 13.9%
Pre-Tax Margin - 3 Yr. Avg. 9.4%
Net Profit Margin 13.9%
Net Profit Margin - 3 Yr. Avg. 9.3%
Effective Tax Rate 0%
Eff/ Tax Rate - 3 Yr. Avg. 7.7%
Payout Ratio 157.9%

APLE stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the APLE stock intrinsic value calculation we used $1041 million for the last fiscal year's total revenue generated by Apple Hospitality REIT. The default revenue input number comes from 2016 income statement of Apple Hospitality REIT. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our APLE stock valuation model: a) initial revenue growth rate of 30.8% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 6.2%, whose default value for APLE is calculated based on our internal credit rating of Apple Hospitality REIT, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Apple Hospitality REIT.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of APLE stock the variable cost ratio is equal to 65.7%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $176 million in the base year in the intrinsic value calculation for APLE stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.6% for Apple Hospitality REIT.

Corporate tax rate of 27% is the nominal tax rate for Apple Hospitality REIT. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the APLE stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for APLE are equal to 406.6%.

Life of production assets of 28.6 years is the average useful life of capital assets used in Apple Hospitality REIT operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for APLE is equal to 25.9%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $3517 million for Apple Hospitality REIT - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 216.776 million for Apple Hospitality REIT is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Apple Hospitality REIT at the current share price and the inputted number of shares is $3.9 billion.

RELATED COMPANIES Price Int.Val. Rating
SOHO Sotherly Hotel 6.00 1.61  str.sell
SHO Sunstone Hotel 15.41 2.85  str.sell
FCH Felcor Lodging 7.02 0.41  str.sell
CLDT Chatham Lodgin 19.75 5.94  str.sell
HPT Hospitality Pr 27.33 4.84  str.sell
CHSP Chesapeake Lod 24.61 5.02  str.sell
INN Summit Hotel P 14.69 3.97  str.sell
AHT Ashford Hospit 5.92 17.49  str.buy
RLJ RLJ Lodging Tr 19.61 5.83  str.sell

COMPANY NEWS

▶ 2 Top Finance Stocks Under $20   [Aug-06-17 10:33AM  Motley Fool]
▶ Apple Hospitality REITs Dividend Trends   [Jul-26-17 12:09PM  Market Realist]
▶ Apple Hospitality REIT Announces August 2017 Distribution   [Jul-20-17 09:00AM  Business Wire]
▶ Apple Hospitality REIT Announces July 2017 Distribution   [Jun-21-17 09:00AM  Business Wire]
▶ 5 Top Hotel REITs for 2017   [May-26-17 03:42PM  Motley Fool]
▶ A 6.5% Yield Paying Monthly Dividends   [May-22-17 11:20AM  GuruFocus.com]
▶ 3 Top Hotel Stocks to Buy in 2017   [May-19-17 01:43PM  Motley Fool]
▶ 2 Bargain Hotel REITs To Buy, 1 To Sell   [May-07-17 09:33AM  Forbes]
▶ 5 Top Dividend Stocks in Real Estate   [08:03AM  Motley Fool]
▶ Apple Hospitality REIT Announces May 2017 Distribution   [Apr-20-17 09:00AM  Business Wire]
▶ Apple Hospitality Remains a Welcoming Place to Invest   [Apr-05-17 01:00PM  TheStreet.com]
▶ 3 Stocks to Buy with Dividends Yielding More than 5%   [Mar-12-17 09:23AM  Motley Fool]
▶ Apple Hospitality REIT Announces March 2017 Distribution   [Feb-21-17 09:00AM  Business Wire]
▶ 5 Stocks That Cut You a Check Each Month   [Feb-19-17 09:39AM  at Motley Fool]
▶ REIT Risk: The Lodging Sector Series   [Jan-23-17 07:00AM  at Forbes]
▶ Reasons To Be Bullish On Lodging REITs in 2017   [Dec-20-16 09:44AM  at Barrons.com]
▶ This Stock Has a 6.5% Dividend and Room to Grow   [Nov-16-16 01:03PM  at Motley Fool]
▶ Andrew Baird, CPA, Joins Capital Square 1031 as Controller   [Oct-31-16 01:24PM  GlobeNewswire]
▶ 10 Stocks That Pay Monthly Dividends: Are Any Worth Buying?   [Sep-30-16 09:56AM  at Motley Fool]
▶ 2 Great High-Dividend Stocks Youve Never Heard Of   [Sep-17-16 12:13PM  at Motley Fool]
▶ 3 Ignored Dividend Stocks That Crush Realty Income   [Sep-11-16 07:13AM  at Forbes]
Stock chart of APLE Financial statements of APLE
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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