Education
About Us
Working with TipRanks
Follow Us
Diversified Healthcare Trust (DHC)
NASDAQ:DHC
Top Page
Diversified Healthcare Trust
(NASDAQ:DHC)
53Neutral
Positive Factors
Debt Refinancing
DHC intends to issue agency-secured debt to repay the $440mm of 2025 notes at a 9.75% interest rate, aiming for new notes around 6%.
Earnings
DHC reported a 2Q24 earnings beat, generating Core FFO of $0.03 versus consensus at $0.02 and Citizens JMP at $0.01 per share.
NOI Growth
DHC’s same-store cash NOI increased 16.1% year-over-year, with a 38.4% increase to SHOP, partially offset by a slight change in the Medical Office / Life Science Portfolio.
Negative Factors
Core FFO Performance
The company reported Core FFO of $0.02, below consensus at $0.04, reflecting lower SHOP NOI and underperformance in the office/life science portfolio.
Guidance Revision
Management lowered FY 2024 SHOP NOI guidance to $102mm to $107mm from the previous range of $120mm to $140mm due to disappointing occupancy trends and expense challenges.
Occupancy Issues
Occupancy within the SHOP was below expectations this quarter as there was no functional change sequentially.
Diversified Healthcare Trust (DHC) vs. S&P 500 (SPY)
Market Cap
$595.85M
Dividend Yield1.62%
Average Volume (3M)951.88K
Price to Earnings (P/E)―
Beta (1Y)1.06
Revenue Growth6.04%
EPS Growth-25.79%
CountryUS
Employees600
SectorReal Estate
Sector Strength73
IndustryREIT - Healthcare Facilities
Share Statistics
EPS (TTM)-1.54
Shares Outstanding241,236,270
10 Day Avg. Volume947,437
30 Day Avg. Volume951,883
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)0.40
Price to Cash Flow (P/CF)8.10
P/FCF Ratio8.10
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$2.00Price Target Upside-16.67% Downside
Rating ConsensusModerate Sell
Number of Analyst Covering1
Diversified Healthcare Trust Business Overview & Revenue Model
Company DescriptionDHC is a real estate investment trust, or REIT, that owns medical office and life science properties, senior living communities and wellness centers throughout the United States. DHC is managed by the operating subsidiary of The RMR Group Inc., an alternative asset management company that is headquartered in Newton, MA.
How the Company Makes MoneyDHC generates revenue primarily through leasing its properties to tenants in the healthcare sector. The company's income is derived from rental payments made by tenants occupying its senior living communities, medical office buildings, and other healthcare facilities. Additionally, DHC may earn income through property management fees and strategic property sales. The diversification of its property portfolio across various segments of the healthcare industry helps mitigate risk and capitalize on growth opportunities, while long-term lease agreements ensure a stable and predictable cash flow. Strategic partnerships with healthcare operators and providers enhance the value and occupancy rate of its facilities, further contributing to its revenue.
Diversified Healthcare Trust Financial Statement Overview
Summary
Diversified Healthcare Trust's financial performance is mixed. Revenue growth and improved cash flow management are positives, yet persistent net losses and negative profitability metrics present significant challenges. The absence of debt reduces leverage risks, but negative return on equity and ongoing cash flow generation issues reflect underlying financial strains.Income Statement
The income statement reveals a challenging period for Diversified Healthcare Trust. Despite an increase in total revenue from 2023 to 2024, net income remains negative, highlighting ongoing profitability issues. The gross profit margin is positive, but the negative EBITDA margin from 2024 indicates significant expenses or non-cash charges weighing down profitability. The revenue growth over the last year is a positive sign, but persistent net losses and negative EBIT margins highlight underlying financial struggles.45
Neutral
Balance Sheet
The balance sheet shows a moderate financial position. The company has positive equity, with a favorable equity ratio indicating a solid capital structure. The absence of debt in 2024 is a positive shift, reducing financial leverage risks. However, the return on equity is negative due to the net loss, indicating inefficiencies or challenges in generating returns from shareholders' investments. Overall, the balance sheet reflects stability but with underlying profitability concerns.60
Neutral
Cash Flow
The cash flow statement presents a mixed picture. Free cash flow turned positive in 2024, a notable improvement from previous years, suggesting better cash management or expense control. The operating cash flow ratio has improved, but the free cash flow to net income ratio indicates cash flow generation challenges despite the positive free cash flow. Continued focus on improving operational cash generation is essential for long-term strength.55
Neutral
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 1.50B | 1.41B | 1.28B | 1.38B | 1.63B | Gross Profit |
| 258.88M | 236.16M | 174.50M | 291.40M | 395.67M | EBIT |
| 0.00 | -74.06M | -75.29M | 6.82M | 113.15M | EBITDA |
| 148.92M | 203.19M | 163.99M | 708.25M | 383.30M | Net Income Common Stockholders |
| -370.25M | -293.57M | -21.83M | 174.51M | -134.31M |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 144.58M | 245.94M | 658.07M | 634.85M | 74.42M | Total Assets |
| 5.14B | 5.45B | 6.00B | 6.62B | 6.48B | Total Debt |
| 2.91B | 2.82B | 3.05B | 3.68B | 3.57B | Net Debt |
| 2.77B | 2.57B | 2.39B | 3.04B | 3.49B | Total Liabilities |
| 3.18B | 3.11B | 3.36B | 3.96B | 3.86B | Stockholders Equity |
| 1.96B | 2.34B | 2.64B | 2.66B | 2.62B |
| Cash Flow | Free Cash Flow | |||
| 112.22M | 10.48M | -339.74M | -290.93M | -27.04M | Operating Cash Flow |
| 112.22M | 10.48M | -40.35M | -63.32M | 158.54M | Investing Cash Flow |
| -187.02M | -202.11M | 387.71M | 242.70M | -40.44M | Financing Cash Flow |
| -22.31M | -249.71M | -676.00M | 746.72M | -79.48M |
Diversified Healthcare Trust Technical Analysis
Negative
2.40
Price Trends
2.53
Negative
2.48
Negative
2.91
Negative
Market Momentum
-0.04
Positive
40.67
Neutral
25.10
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DHC, the sentiment is Negative. The current price of 2.4 is below the 20-day moving average (MA) of 2.56, below the 50-day MA of 2.53, and below the 200-day MA of 2.91, indicating a bearish trend. The MACD of -0.04 indicates Positive momentum. The RSI at 40.67 is Neutral, neither overbought nor oversold. The STOCH value of 25.10 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DHC.
Diversified Healthcare Trust Risk Analysis
Diversified Healthcare Trust disclosed 59 risk factors in its most recent earnings report. Diversified Healthcare Trust reported the most risks in the “Finance & Corporate” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Diversified Healthcare Trust Peers Comparison
Overall Rating
UnderperformOutperform
Sector (61)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
78 Outperform | $98.39B | 186.12 | 3.32% | 1.71% | 20.40% | 57.80% | |
74 Outperform | $10.73B | 25.35 | 10.02% | 7.04% | 9.90% | 56.41% | |
72 Outperform | $14.41B | 56.39 | 3.29% | 5.97% | 23.82% | -37.59% | |
63 Neutral | $30.88B | 352.80 | 0.80% | 2.62% | 9.48% | ― | |
61 Neutral | $4.70B | 17.65 | -3.00% | 11.43% | 5.99% | -19.07% | |
60 Neutral | $5.88B | ― | -10.95% | 7.40% | -5.62% | -140.10% | |
53 Neutral | $595.85M | ― | -17.24% | 1.62% | 6.04% | -25.79% |
* Real Estate Sector Average
Performance Comparison
DHC
Diversified Healthcare Trust
2.40
0.08
3.45%
DOC
Healthpeak Properties
20.22
2.74
15.68%
WELL
Welltower
153.21
63.16
70.14%
OHI
Omega Healthcare
38.08
8.52
28.82%
VTR
Ventas
68.76
27.19
65.41%
HR
Healthcare Realty Trust
16.90
3.79
28.91%
Diversified Healthcare Trust Earnings Call Summary
Earnings Call Date: Feb 25, 2025 | % Change Since: -2.04% | Next Earnings Date: May 12, 2025
Earnings Call Sentiment Positive
The earnings call highlighted strong revenue growth, successful property sales, and strategic financing efforts, indicating positive momentum. However, challenges such as sequential NOI decline, tenant vacancies, and increased expenses due to weather impacts were noted. The overall sentiment leans towards positive due to the outweighing highlights.Highlights
Revenue Growth and SHOP Performance
Diversified Healthcare Trust reported total revenues of $379.6 million for the fourth quarter, marking a 5% year-over-year increase. SHOP occupancy reached 80% for the first time since Q1 2020, with a 56% improvement in SHOP NOI and a 7.3% increase in SHOP revenues.
Successful Property Sales and Strategic Dispositions
Completed property sales close to $179 million in Q1 2025, including the sale of the Muse Life Science campus for $159 million. Additionally, there are active marketing efforts for 34 communities with signed term sheets for five communities targeting proceeds of $68 million by Q2 2025.
Financing Strategy and Debt Management
Signed term sheets for $340 million in anticipated loan proceeds with a favorable weighted average interest rate of approximately 6.5%. Progress made in addressing the 2025 and 2026 debt maturities with significant asset sales and refinancing plans.
Increased FFO and NOI
Normalized FFO for the fourth quarter was $5.3 million or $0.02 per share, representing a 31% sequential quarter increase. Same property cash basis NOI saw an 18.7% improvement year over year.
Lowlights
Sequential Decline in NOI
Same property cash basis NOI experienced a 1.4% decline sequentially, mainly due to additional insurance remediation costs from hurricanes impacting Q4 results in the SHOP segment.
Tenant Vacancy and Lease Expirations
Approximately 7.9% of annualized revenue in the medical office and life science portfolio is scheduled to expire through year-end 2025, including a significant tenant vacating in Q1 2025, occupying close to 233,000 square feet.
Expense Growth and Weather Impacts
Expense growth increased by 3.9% driven by salary and wages, general maintenance, and one-time impacts from weather events, totaling $4.4 million in additional expenses.
Company Guidance
During the Diversified Healthcare Trust Fourth Quarter 2024 Earnings Conference Call, the company provided several key metrics and guidance for 2025. The fourth quarter saw total revenues of $379.6 million, a 5% year-over-year increase, and normalized FFO of $5.3 million or $0.02 per share, surpassing consensus estimates. The SHOP sector achieved 80% occupancy, with a 56% improvement in NOI, and a 7.3% increase in revenues. The medical office and life science portfolio completed 112,000 square feet of leasing activity, with a 6.9% rent increase and same-store occupancy at 90.2%. Looking ahead, approximately 7.9% of annualized revenue is set to expire by year-end 2025. The company anticipates 2025 SHOP NOI to range from $120 to $135 million, while medical office and life science NOI is projected at $104 to $112 million. CapEx for 2025 is expected to be between $150 and $170 million, with a significant reduction from previous years. The company also discussed its refinancing strategy, highlighting $340 million in anticipated loan proceeds and a proactive approach to address upcoming debt maturities, including the $380 million due in 2025 and the zero coupon bonds due in 2026.Diversified Healthcare Trust Corporate Events
Executive/Board Changes
Diversified Healthcare Trust Elects Alan L. Felder as Trustee
Positive
Mar 20, 2025
On March 20, 2025, Diversified Healthcare Trust announced the election of Alan L. Felder as an Independent Trustee, expanding the board from seven to eight members. Mr. Felder, with extensive experience in investment banking, particularly in real estate, lodging, and leisure sectors, will serve on the Audit Committee. His election is expected to strengthen the board’s expertise in these areas, potentially enhancing the company’s strategic direction and governance.
Business Operations and StrategyFinancial Disclosures
Diversified Healthcare Trust Outlines 2025 Strategic Initiatives
Positive
Feb 26, 2025
On February 26, 2025, Diversified Healthcare Trust released an investor presentation outlining its strategic initiatives and financial guidance for 2025. The company anticipates improvements in its Senior Housing Operating Portfolio (SHOP) with expected occupancy growth and margin improvements. DHC plans to strengthen its balance sheet through strategic capital recycling and addressing upcoming debt maturities. The presentation highlights the company’s focus on maintaining a diversified tenant base and capitalizing on favorable trends in the senior living and healthcare sectors. The guidance for 2025 includes projected increases in net operating income across its various segments, reflecting a positive outlook for the company’s operations and market positioning.
Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.