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Are Investors Undervaluing Diversified Healthcare Trust (DHC) Right Now?

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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.

Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.

In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.

Diversified Healthcare Trust (DHC - Free Report) is a stock many investors are watching right now. DHC is currently holding a Zacks Rank of #2 (Buy) and a Value grade of A. The stock is trading with a P/E ratio of 7.44, which compares to its industry's average of 15.66. Over the past year, DHC's Forward P/E has been as high as 45.38 and as low as 5.77, with a median of 8.07.

Finally, investors should note that DHC has a P/CF ratio of 7.91. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. This company's current P/CF looks solid when compared to its industry's average P/CF of 15.45. Within the past 12 months, DHC's P/CF has been as high as 37.22 and as low as -238.41, with a median of -49.57.

These are only a few of the key metrics included in Diversified Healthcare Trust's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, DHC looks like an impressive value stock at the moment.


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