Diversified Healthcare Trust Stock Beneish M Score

DHC Stock  USD 2.44  0.01  0.41%   
This module uses fundamental data of Diversified Healthcare to approximate the value of its Beneish M Score. Diversified Healthcare M Score tells investors if the company management is likely to be manipulating earnings. The score is calculated using eight financial indicators that are adjusted by a specific multiplier. Please note, the M Score is a probabilistic model and cannot detect companies that manipulate their earnings with 100% accuracy. Check out Diversified Healthcare Piotroski F Score and Diversified Healthcare Altman Z Score analysis.
  
At present, Diversified Healthcare's Long Term Debt Total is projected to increase significantly based on the last few years of reporting. The current year's Net Debt To EBITDA is expected to grow to 13.14, whereas Net Debt is forecasted to decline to about 1.9 B. At present, Diversified Healthcare's Free Cash Flow Yield is projected to slightly decrease based on the last few years of reporting. The current year's Stock Based Compensation To Revenue is expected to grow to 0, whereas Price To Sales Ratio is forecasted to decline to 0.60.
At this time, it appears that Diversified Healthcare is a possible manipulator. The earnings manipulation may begin if Diversified Healthcare's top management creates an artificial sense of financial success, forcing the stock price to be traded at a high price-earnings multiple than it should be. In general, excessive earnings management by Diversified Healthcare executives may lead to removing some of the operating profits from subsequent periods to inflate earnings in the following periods. This way, the manipulation of Diversified Healthcare's earnings can lead to misrepresentations of actual financial condition, taking the otherwise loyal stakeholders on to the path of questionable ethical practices and plain fraud.
2.86
Beneish M Score - Possible Manipulator
Elasticity of Receivables

1.0

Focus
Asset Quality

14.16

Focus
Expense Coverage

1.11

Focus
Gross Margin Strengs

0.96

Focus
Accruals Factor

1.11

Focus
Depreciation Resistance

1.02

Focus
Net Sales Growth

1.05

Focus
Financial Leverage Condition

0.94

Focus

Diversified Healthcare Beneish M-Score Indicator Trends

The cure to earnings manipulation is the transparency of financial reporting. It will typically remove the temptation of the top executives to inflate earnings (i.e., to promote the idea of 'winning at any cost'). Because a healthy internal audit department can enhance transparency, the board should promote the auditors' access to all the record-keeping systems across the enterprise. For example, if Diversified Healthcare's auditors report directly to the board (not management), the managers will be reluctant to manipulate simply due to the fear of punishment. On the other hand, the auditors will be free to investigate the ledgers properly because they know that the board has their back.
Current ValueLast YearChange From Last Year 10 Year Trend
Net Receivables85.5 M81.4 M
Sufficiently Up
Slightly volatile
Total Revenue1.5 B1.4 B
Sufficiently Up
Slightly volatile
Total Assets4.2 B5.4 B
Significantly Down
Slightly volatile
Total Current Assets146.8 M262.5 M
Way Down
Slightly volatile
Non Current Assets Total32.3 M33.9 M
Notably Down
Pretty Stable
Property Plant Equipment6.1 B5.6 B
Significantly Up
Slightly volatile
Depreciation And Amortization304.6 M284.1 M
Notably Up
Slightly volatile
Selling General Administrative30.3 M26.1 M
Fairly Up
Very volatile
Total Current Liabilities28.4 M29.9 M
Notably Down
Pretty Stable
Non Current Liabilities TotalB3.1 B
Way Down
Slightly volatile
Short Term Debt1.7 M1.8 M
Notably Down
Very volatile
Long Term Debt3.1 B2.8 B
Moderately Up
Slightly volatile
Short Term Investments6.4 M6.8 M
Notably Down
Pretty Stable
Long Term Investments132.7 M129.9 M
Fairly Up
Slightly volatile
Gross Profit Margin0.160.1675
Sufficiently Down
Slightly volatile

Diversified Healthcare Beneish M-Score Driver Matrix

One of the toughest challenges investors face today is learning how to quickly synthesize historical financial statements and information provided by the company, SEC reporting, and various external parties in order to detect the potential manipulation of earnings. Understanding the correlation between Diversified Healthcare's different financial indicators related to revenue, expenses, operating profit, and net earnings helps investors identify and prioritize their investing strategies towards Diversified Healthcare in a much-optimized way. Analyzing correlations between earnings drivers directly associated with dollar figures is the most effective way to find Diversified Healthcare's degree of accounting gimmicks and manipulations.

About Diversified Healthcare Beneish M Score

M-Score is one of many grading techniques for value stocks. It was developed by Professor M. Daniel Beneish of the Kelley School of Business at Indiana University and published in 1999 under the paper titled The Detection of Earnings Manipulation. The Beneish score is a multi-factor model that utilizes financial identifiers to compile eight variables used to classify whether a company has manipulated its reported earnings. The variables are built from the officially filed financial statements to create a final score call 'M Score.' The score helps to identify companies that are likely to manipulate their profits if they show deteriorating gross margins, operating expenses, and leverage against growing revenue.

Other Operating Expenses

1.48 Billion

At present, Diversified Healthcare's Other Operating Expenses is projected to increase significantly based on the last few years of reporting.

Diversified Healthcare Earnings Manipulation Drivers

Although earnings manipulation is typically not the result of intentional misconduct by the c-level executives, it is still a widespread practice by the senior management of public companies such as Diversified Healthcare. It is usually done by a series of misrepresentations of various accounting rules and operating activities across multiple financial cycles. The best way to spot the manipulation is to examine the historical financial statement to find inconsistencies in earning reports to find trends in assets or liabilities that are not sustainable in the future.
201920202021202220232024 (projected)
Net Receivables2.0M104.8M82.1M8.7M81.4M85.5M
Total Revenue1.0B1.6B1.4B1.3B1.4B1.5B
Total Assets6.7B6.5B6.6B6.0B5.4B4.2B
Total Current Assets261.8M203.3M1.0B688.7M262.5M146.8M
Net Debt3.5B3.5B3.0B2.4B2.6B1.9B
Short Term Debt537.5M303.2M800M700M1.8M1.7M
Long Term Debt3.0B3.5B2.8B2.3B2.8B3.1B
Operating Income226.0M113.2M6.8M(75.3M)4.1M3.9M
Investments105.0M(2.2M)367.0M671.8M(246.9M)(234.5M)
Gross Profit Margin0.530.240.210.140.170.16

Diversified Healthcare ESG Sustainability

Some studies have found that companies with high sustainability scores are getting higher valuations than competitors with lower social-engagement activities. While most ESG disclosures are voluntary and do not directly affect the long term financial condition, Diversified Healthcare's sustainability indicators can be used to identify proper investment strategies using environmental, social, and governance scores that are crucial to Diversified Healthcare's managers, analysts, and investors.
Environmental
Governance
Social

About Diversified Healthcare Fundamental Analysis

The Macroaxis Fundamental Analysis modules help investors analyze Diversified Healthcare Trust's financials across various querterly and yearly statements, indicators and fundamental ratios. We help investors to determine the real value of Diversified Healthcare using virtually all public information available. We use both quantitative as well as qualitative analysis to arrive at the intrinsic value of Diversified Healthcare Trust based on its fundamental data. In general, a quantitative approach, as applied to this company, focuses on analyzing financial statements comparatively, whereas a qaualitative method uses data that is important to a company's growth but cannot be measured and presented in a numerical way.
Please read more on our fundamental analysis page.

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When determining whether Diversified Healthcare is a strong investment it is important to analyze Diversified Healthcare's competitive position within its industry, examining market share, product or service uniqueness, and competitive advantages. Beyond financials and market position, potential investors should also consider broader economic conditions, industry trends, and any regulatory or geopolitical factors that may impact Diversified Healthcare's future performance. For an informed investment choice regarding Diversified Stock, refer to the following important reports:
Check out Diversified Healthcare Piotroski F Score and Diversified Healthcare Altman Z Score analysis.
You can also try the Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Is Diversified REITs space expected to grow? Or is there an opportunity to expand the business' product line in the future? Factors like these will boost the valuation of Diversified Healthcare. If investors know Diversified will grow in the future, the company's valuation will be higher. The financial industry is built on trying to define current growth potential and future valuation accurately. All the valuation information about Diversified Healthcare listed above have to be considered, but the key to understanding future value is determining which factors weigh more heavily than others.
Quarterly Earnings Growth
(0.68)
Dividend Share
0.04
Earnings Share
(1.59)
Revenue Per Share
6.173
Quarterly Revenue Growth
0.048
The market value of Diversified Healthcare is measured differently than its book value, which is the value of Diversified that is recorded on the company's balance sheet. Investors also form their own opinion of Diversified Healthcare's value that differs from its market value or its book value, called intrinsic value, which is Diversified Healthcare's true underlying value. Investors use various methods to calculate intrinsic value and buy a stock when its market value falls below its intrinsic value. Because Diversified Healthcare's market value can be influenced by many factors that don't directly affect Diversified Healthcare's underlying business (such as a pandemic or basic market pessimism), market value can vary widely from intrinsic value.
Please note, there is a significant difference between Diversified Healthcare's value and its price as these two are different measures arrived at by different means. Investors typically determine if Diversified Healthcare is a good investment by looking at such factors as earnings, sales, fundamental and technical indicators, competition as well as analyst projections. However, Diversified Healthcare's price is the amount at which it trades on the open market and represents the number that a seller and buyer find agreeable to each party.