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Are Investors Undervaluing DiamondRock Hospitality (DRH) 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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is DiamondRock Hospitality (DRH - Free Report) . DRH is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 7.96, while its industry has an average P/E of 15.52. Over the last 12 months, DRH's Forward P/E has been as high as 10.15 and as low as 7.69, with a median of 8.65.
DRH is also sporting a PEG ratio of 1.96. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. DRH's PEG compares to its industry's average PEG of 2.33. Within the past year, DRH's PEG has been as high as 6.23 and as low as 1.96, with a median of 4.98.
Another notable valuation metric for DRH is its P/B ratio of 1.07. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.67. Within the past 52 weeks, DRH's P/B has been as high as 1.25 and as low as 0.99, with a median of 1.12.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. DRH has a P/S ratio of 1.52. This compares to its industry's average P/S of 4.02.
Finally, we should also recognize that DRH has a P/CF ratio of 10.57. 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. DRH's P/CF compares to its industry's average P/CF of 15.58. Within the past 12 months, DRH's P/CF has been as high as 11.62 and as low as 8.71, with a median of 10.03.
These are only a few of the key metrics included in DiamondRock Hospitality'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, DRH looks like an impressive value stock at the moment.
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Are Investors Undervaluing DiamondRock Hospitality (DRH) Right Now?
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 a variety of methods, including tried-and-true valuation metrics, to find these stocks.
Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.
One company value investors might notice is DiamondRock Hospitality (DRH - Free Report) . DRH is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock holds a P/E ratio of 7.96, while its industry has an average P/E of 15.52. Over the last 12 months, DRH's Forward P/E has been as high as 10.15 and as low as 7.69, with a median of 8.65.
DRH is also sporting a PEG ratio of 1.96. This popular figure is similar to the widely-used P/E ratio, but the PEG ratio also considers a company's expected EPS growth rate. DRH's PEG compares to its industry's average PEG of 2.33. Within the past year, DRH's PEG has been as high as 6.23 and as low as 1.96, with a median of 4.98.
Another notable valuation metric for DRH is its P/B ratio of 1.07. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 1.67. Within the past 52 weeks, DRH's P/B has been as high as 1.25 and as low as 0.99, with a median of 1.12.
Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. DRH has a P/S ratio of 1.52. This compares to its industry's average P/S of 4.02.
Finally, we should also recognize that DRH has a P/CF ratio of 10.57. 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. DRH's P/CF compares to its industry's average P/CF of 15.58. Within the past 12 months, DRH's P/CF has been as high as 11.62 and as low as 8.71, with a median of 10.03.
These are only a few of the key metrics included in DiamondRock Hospitality'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, DRH looks like an impressive value stock at the moment.