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Richard Sloan from the University of Michigan was first to document what is referred to as the "accrual anomaly". His 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones.
As of Jun. 2026, Diamondrock Hospitality Co has a Sloan Ratio of -1.26%, indicating the company is in the safe zone and there is no funny business with accruals.
Diamondrock Hospitality Co (FRA:HBO) Sloan Ratio % Explanation
A former University of Michigan researcher, Richard Sloan's 1996 paper found that shares of companies with small or negative accruals vastly outperform (+10%) those of companies with large ones. In fact, for the 40-year period between 1962 and 2001, buying the lowest accrual companies and shorting the highest accrual companies resulted in an average annual compounded return of 18%, more than double the S&P 500's 7.4% annual return over the same period.
If the Sloan Ratio is between -10% and 10%, the company is in the safe zone and there is no funny business with accruals.
If the Sloan Ratio is less than between -25% and -10% on the negative side, and between 10% and 25% on the positive side, this is a warning stage of accrual build up.
If the Sloan Ratio is less than -25% or greater than 25%, and this ratio is consistent over several quarters or even years, be careful. Earnings are highly likely to be made up of accruals.
As of Jun. 2026, Diamondrock Hospitality Co has a Sloan Ratio of -1.26%, indicating the company is in the safe zone and there is no funny business with accruals.
Diamondrock Hospitality Co Sloan Ratio % Related Terms
Diamondrock Hospitality Co Sloan Ratio % Historical Data
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
For the REIT - Hotel & Motel subindustry, Diamondrock Hospitality Co's Sloan Ratio %, along with its competitors' market caps and Sloan Ratio % data, can be viewed below:
* Competitive companies are chosen from companies within the same industry, with headquarter located in same country, with closest market capitalization; x-axis shows the market cap, and y-axis shows the term value; the bigger the dot, the larger the market cap. Note that "N/A" values will not show up in the chart.
Diamondrock Hospitality Co Sloan Ratio % vs REITs Industry
For the REITs industry and Real Estate sector, Diamondrock Hospitality Co's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Diamondrock Hospitality Co's Sloan Ratio % falls into.
Diamondrock Hospitality Co Sloan Ratio % Calculation
Earnings contain a lot of non cash earnings which is called accruals. The Sloan ratio is a way to identify firms with low non-cash or accrual-derived earnings relative to their cash flow.
Diamondrock Hospitality Co's Net Income for the trailing twelve months (TTM) ended in Jun. 2026 was 19.191 (Sep. 2025 ) + 22.388 (Dec. 2025 ) + 12.511 (Mar. 2026 ) + 78.537 (Jun. 2026 ) = €132.6 Mil.
Diamondrock Hospitality Co's Cash Flow from Operations for the trailing twelve months (TTM) ended in Jun. 2026 was 63.522 (Sep. 2025 ) + 58.004 (Dec. 2025 ) + 18.977 (Mar. 2026 ) + 69.07 (Jun. 2026 ) = €209.6 Mil.
Diamondrock Hospitality Co's Cash Flow from Investing for the trailing twelve months (TTM) ended in Jun. 2026 was -16.76 (Sep. 2025 ) + -17.611 (Dec. 2025 ) + -18.003 (Mar. 2026 ) + 9.053 (Jun. 2026 ) = €-43.3 Mil.
* For Operating Data section: All numbers are indicated by the unit behind each term and all currency related amount are in USD. * For other sections: All numbers are in millions except for per share data, ratio, and percentage. All currency related amount are indicated in the company's associated stock exchange currency.
Diamondrock Hospitality Co (FRA:HBO) has a Sloan Ratio % of -1.26% as of Jun. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Diamondrock Hospitality Co and its competitors.
Is Diamondrock Hospitality Co's Sloan Ratio % too high?
Diamondrock Hospitality Co's current Sloan Ratio % is -1.26%. Overall, Diamondrock Hospitality Co has a GF Score™ of 66/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Diamondrock Hospitality Co's Sloan Ratio % compare to PK and SHO?
Diamondrock Hospitality Co's Sloan Ratio % of -1.26% can be compared against companies in the REITs industry. See the competitive comparison table and distribution chart on this page for a detailed peer-by-peer breakdown.
What is a good Sloan Ratio % for a REITs company?
A good Sloan Ratio % depends on the REITs industry context. However, Sloan Ratio % should not be evaluated in isolation — investors should consider it alongside profitability, growth, and financial strength metrics. Use the industry distribution chart on this page to see where any company falls relative to its peers.
What does a high Sloan Ratio % mean?
A high Sloan Ratio % can signal that a stock is expensive relative to its fundamentals. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Diamondrock Hospitality Co and its competitors. Diamondrock Hospitality Co's current Sloan Ratio % is -1.26%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Diamondrock Hospitality Co stock overvalued right now?
Based on GuruFocus' analysis, Diamondrock Hospitality Co (FRA:HBO) is currently considered Significantly Overvalued. The stock's GF Value™ is €7.95, compared to a current price of €11.50 — trading 44.7% above its estimated fair value. The current Sloan Ratio % is -1.26%. Diamondrock Hospitality Co's overall GF Score™ is 66/100 with 8 warning signs to review. Investors should evaluate multiple metrics — including profitability, growth, and financial strength — before making a decision.
How is Sloan Ratio % calculated?
Sloan Ratio % is calculated from a company's financial statements. For Diamondrock Hospitality Co (FRA:HBO), the current Sloan Ratio % is -1.26% as of Jun. 2026. GuruFocus calculates this using data sourced from SEC filings and annual reports. See the calculation section and 30-year financial data on this page for the full breakdown.
Is Diamondrock Hospitality Co (FRA:HBO) Overvalued in 2026?
Based on GuruFocus' analysis, Diamondrock Hospitality Co stock appears to be overvalued.
The current stock price of €11.50 is trading 44.7% above its estimated GF Value™ of €7.95.
GuruFocus considers Diamondrock Hospitality Co to be Significantly Overvalued.
Key valuation signals for FRA:HBO:
Sloan Ratio %: -1.26%
GF Value™: €7.95 vs. price of €11.50 (44.7% above fair value)
No single metric tells the full story. See the FRA:HBO stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Diamondrock Hospitality Company is a real estate investment trust that owns lodging properties. Its business is to acquire, own, manage, and renovate full-service hotel properties in the United States. It operates in cities such as Chicago, Boston, New York, Denver, and others. Within DiamondRock's holdings, the majority of the hotel brands include Marriott, Starwood, and Hilton. The company operates in one reportable segment: The hotel ownership segment, which is comprised of upper upscale and luxury chain scale hotels that offer hotel rooms, food and beverage and other ancillary guest services.
66GF Score
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Sloan Ratio % is just one metric. See GF Value™, 30-year financials, guru trades, warning signs, and more.
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