Is the Whitbread share price expensive at 4875p?

Whitbread (LON:WTB) is the £8.5bn operator of budget hotel chain Premier Inn. The group also operates some pubs and restaurants, but, after its sale of coffee chain Costa, Premier Inn is by far its largest brand. The Company operates over 800 Premier Inn hotels and over 76,000 rooms across the United Kingdom and is currently expanding in Germany.

Right now the Whitbread share price is on the expensive side from a factor perspective, based on its Value Rank of 32. Let's see why this is.

A closer look at Whitbread's Value Rank

We can see by using Whitbread’s StockReport that the group has a:

• Rolling price to book value of 1.37,
• Trailing twelve month price to earnings ratio of 19.3
• Trailing twelve month price to free cashflow of
• Rolling dividend yield of 2.02%
• Trailing twelve-month price to sales ratio of 4.14

This combination of financial traits suggests that Whitbread stock is toward the more expensive end of the market. Being expensive is not the end of the world, of course - but it does help to have favourable exposures to other factors to justify the share price premium.

What does this mean for potential investors?

Some of the best quality stocks in the market have defensible models that can deliver high levels of shareholder returns over the long term. But there are no guarantees and it's important to do your own research. Indeed, we've identified some areas of concern with Whitbread that you can find out about here.