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Is Diversified Healthcare Trust (DHC) Stock Undervalued Right Now?

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While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.

Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.

On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.

One company value investors might notice is Diversified Healthcare Trust (DHC - Free Report) . DHC is currently sporting a Zacks Rank #2 (Buy), as well as an A grade for Value. The stock has a Forward P/E ratio of 7.26. This compares to its industry's average Forward P/E of 15.58. Over the last 12 months, DHC's Forward P/E has been as high as 45.38 and as low as 5.77, with a median of 8.00.

Finally, investors will want to recognize that DHC has a P/CF ratio of 8.62. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. DHC's current P/CF looks attractive when compared to its industry's average P/CF of 15.45. DHC's P/CF has been as high as 37.22 and as low as -189.90, with a median of 6.07, all within the past year.

These figures are just a handful of the metrics value investors tend to look at, but they help show that Diversified Healthcare Trust is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, DHC feels like a great value stock at the moment.


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