It is Poised to be a Bull Market for Diversified Healthcare Trust (DHC)

Diversified Healthcare Trust (NASDAQ: DHC) stock jumped 1.77% on Thursday to $1.15 against a previous-day closing price of $1.13. With 2.25 million shares changed hands, the volume of the stock remained lighter than its average volume of 4.4 million shares. During the session, the REIT – Healthcare Facilities company that operates in wider Real Estate sector, reached to the highest price of $1.1500 whereas the lowest price it dropped to was $1.0600. The 52-week range on DHC shows that it touched its highest point at $2.37 and its lowest point at $0.61 during that stretch. It currently has a 1-year price target of $1.63. With its current market cap of 274.50 million, DHC has annualized dividend of $0.04 while the current yield stands at 3.48%. Beta for the stock currently stands at 1.74.

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Price Performance and Earnings:

Stock performance is one of the indicators that investors use to determine whether they will profit from a stock. The price performance of DHC was up-trending over the past week, with a rise of 15.49%, but this was up by 27.41% over a month. Three-month performance surged to 26.39% while six-month performance rose 9.52%. The stock lost -46.76% in the past year, while it has gained 77.80% so far this year. A look at the trailing 12-month EPS for DHC yields -1.30 with Next year EPS estimates of -0.83. For the next quarter, that number is -0.23. This implies an EPS growth rate of -109.00% for this year and 8.20% for next year. EPS is expected to grow by 3.20% annually over the next five years; however, over the past five years, the company experienced an annual growth rate of -16.10%.

Float and Shares Shorts:

At present, 238.59 million DHC shares are outstanding with a float of 236.44 million shares on hand for trading. On May 14, 2023, short shares totaled 3.92 million, which was 1.64% higher than short shares on Apr 13, 2023. In addition to Mr. Adam David Portnoy as the firm’s Managing Chair of the Board, Ms. Jennifer F. Francis serves as its Pres, CEO & Managing Trustee.

Institutional Ownership:

Through their ownership of 76.04% of DHC’s outstanding shares, institutional investors have majority control over the company. Other institutions hold 43.71% of DHC, in contrast to 30.54% held by mutual funds. Shares owned by individuals account for 1.46%. As the largest shareholder in DHC with 10.11% of the stake, The Vanguard Group, Inc. holds 24,242,148 shares worth 24,242,148. A second-largest stockholder of DHC, Charles Schwab Investment Managem, holds 17,358,304 shares, controlling over 7.24% of the firm’s shares. BlackRock Fund Advisors is the third largest shareholder in DHC, holding 15,743,163 shares or 6.57% stake. With a 5.10% stake in DHC, the Schwab Fundamental US Small Compa is the largest stakeholder. A total of 12,227,241 shares are owned by the mutual fund manager. The Vanguard Real Estate Index Fund, which owns about 4.39% of DHC stock, is the second-largest Mutual Fund holder. It holds 10,529,280 shares valued at 9.61 million. Vanguard Total Stock Market ETF holds 3.07% of the stake in DHC, owning 7,363,201 shares worth 6.72 million.

An Overview of Recent Financials:

Understanding a company as a customer does not mean you will understand it as an investor. The wise investor uses quantitative research to analyze metrics such as revenue, net income, and earnings. In its fiscal quarter reported on Mar 30, 2023, DHC reported revenue of $313.03M and operating income of -$18.51M. The EBITDA in the recently reported quarter was $42.08M and diluted EPS was -$0.46.

Analysts Ratings:

Reading analyst opinions is an effective way to decide where to invest, and there are several opinions available for DHC since 0 analysts follow the stock currently. In the same way, a target price assigned to a stock can also reveal much about its potential. With DHC analysts setting a high price target of $3.00 and a low target of $1.00, the average target price over the next 12 months is $2.00. Based on these targets, DHC could surge 160.87% to reach the target high and fall by -13.04% to reach the target low. Reaching the average price target will result in a growth of 73.91% from current levels.

EPS: Estimates vs Actual

It is also common to use earnings estimates to evaluate a firm’s growth potential and to determine trading strategy.

Dividends & Yield:

In terms of dividends, DHC has a current ratio of $0.04, which is $0.04 over the trailing 12-months, while a dividend of $0.54 is likely to be paid on average over the next five years. Dividend yield is another indicator that appeals to many investors, and DHC currently yields $3.48. In the past year, DHC’s dividend yield has been $3.48, but when looking at the stock over the past five years, its yield has been $6.74. Accordingly, DHC has a current buyback yield of $0.06. This was $0.06 for the TTM, and it was $0.04 for the past five years.

Summary of Insider Activity:

Insiders traded DHC stock several times over the past three months with 0 Buys and 0 Sells. In these transactions, 0 shares were bought while 0 shares were sold. The number of buy transactions has increased to 10 while that of sell transactions has risen to 3 over the past year. The total number of shares bought during that period was 260,000 while 39,381 shares were sold.

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