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Diversified Healthcare (DHC) Laps the Stock Market: Here's Why

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In the latest market close, Diversified Healthcare (DHC - Free Report) reached $2, with a +1.01% movement compared to the previous day. The stock exceeded the S&P 500, which registered a gain of 0.43% for the day. Elsewhere, the Dow saw an upswing of 0.19%, while the tech-heavy Nasdaq appreciated by 0.71%.

Heading into today, shares of the residential care real estate investment trust had lost 16.1% over the past month, lagging the Finance sector's loss of 2.32% and the S&P 500's loss of 2.1% in that time.

The upcoming earnings release of Diversified Healthcare will be of great interest to investors. The company's earnings report is expected on November 1, 2023. The company is predicted to post an EPS of $0.08, indicating a 233.33% growth compared to the equivalent quarter last year. At the same time, our most recent consensus estimate is projecting a revenue of $356.42 million, reflecting a 10.37% rise from the equivalent quarter last year.

For the full year, the Zacks Consensus Estimates project earnings of $0.28 per share and a revenue of $1.41 billion, demonstrating changes of +275% and +10.22%, respectively, from the preceding year.

Investors should also take note of any recent adjustments to analyst estimates for Diversified Healthcare. These revisions typically reflect the latest short-term business trends, which can change frequently. As a result, upbeat changes in estimates indicate analysts' favorable outlook on the company's business health and profitability.

Our research reveals that these estimate alterations are directly linked with the stock price performance in the near future. To exploit this, we've formed the Zacks Rank, a quantitative model that includes these estimate changes and presents a viable rating system.

The Zacks Rank system, stretching from #1 (Strong Buy) to #5 (Strong Sell), has a noteworthy track record of outperforming, validated by third-party audits, with stocks rated #1 producing an average annual return of +25% since the year 1988. Over the past month, there's been a 21.74% rise in the Zacks Consensus EPS estimate. As of now, Diversified Healthcare holds a Zacks Rank of #5 (Strong Sell).

With respect to valuation, Diversified Healthcare is currently being traded at a Forward P/E ratio of 7.07. This signifies a discount in comparison to the average Forward P/E of 10.16 for its industry.

We can also see that DHC currently has a PEG ratio of 0.31. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. By the end of yesterday's trading, the REIT and Equity Trust - Other industry had an average PEG ratio of 2.19.

The REIT and Equity Trust - Other industry is part of the Finance sector. This group has a Zacks Industry Rank of 177, putting it in the bottom 30% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Ensure to harness Zacks.com to stay updated with all these stock-shifting metrics, among others, in the next trading sessions.


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