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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 Mar. 2026, Diversified Healthcare Trust has a Sloan Ratio of -12.14%, indicating there is a warning stage of accrual build up.
Diversified Healthcare Trust (NAS:DHC) 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 Mar. 2026, Diversified Healthcare Trust has a Sloan Ratio of -12.14%, indicating there is a warning stage of accrual build up.
Diversified Healthcare Trust Sloan Ratio % Related Terms
Diversified Healthcare Trust 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 - Healthcare Facilities subindustry, Diversified Healthcare Trust'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.
Diversified Healthcare Trust Sloan Ratio % vs REITs Industry
For the REITs industry and Real Estate sector, Diversified Healthcare Trust's Sloan Ratio % distribution charts can be found below:
* The bar in red indicates where Diversified Healthcare Trust's Sloan Ratio % falls into.
Diversified Healthcare Trust 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.
Diversified Healthcare Trust's Net Income for the trailing twelve months (TTM) ended in Mar. 2026 was -91.639 (Jun. 2025 ) + -164.04 (Sep. 2025 ) + -21.221 (Dec. 2025 ) + -43.275 (Mar. 2026 ) = $-320 Mil.
Diversified Healthcare Trust's Cash Flow from Operations for the trailing twelve months (TTM) ended in Mar. 2026 was 53.02 (Jun. 2025 ) + -49.285 (Sep. 2025 ) + -20.11 (Dec. 2025 ) + 8.342 (Mar. 2026 ) = $-8 Mil.
Diversified Healthcare Trust's Cash Flow from Investing for the trailing twelve months (TTM) ended in Mar. 2026 was -21.055 (Jun. 2025 ) + 6.116 (Sep. 2025 ) + 207.418 (Dec. 2025 ) + 13.58 (Mar. 2026 ) = $206 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.
Diversified Healthcare Trust (DHC) has a Sloan Ratio % of -12.14% as of Mar. 2026. Sloan ratio measures earnings quality based on the amount of accruals. View historical data on Diversified Healthcare Trust and its competitors.
Is Diversified Healthcare Trust's Sloan Ratio % too high?
Diversified Healthcare Trust's current Sloan Ratio % is -12.14%. Overall, Diversified Healthcare Trust has a GF Score™ of 54/100 and is considered Significantly Overvalued, reflecting its overall financial health beyond just this single metric.
How does Diversified Healthcare Trust's Sloan Ratio % compare to LTC and MPT?
Diversified Healthcare Trust's Sloan Ratio % of -12.14% 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 Diversified Healthcare Trust and its competitors. Diversified Healthcare Trust's current Sloan Ratio % is -12.14%. However, context matters — high-growth companies often justify higher valuations. Always evaluate alongside other metrics like GF Score™ and GF Value™.
Is Diversified Healthcare Trust stock overvalued right now?
Based on GuruFocus' analysis, Diversified Healthcare Trust (DHC) is currently considered Significantly Overvalued. The stock's GF Value™ is $3.20, compared to a current price of $9.16 — trading 186.3% above its estimated fair value. The current Sloan Ratio % is -12.14%. Diversified Healthcare Trust's overall GF Score™ is 54/100 with 7 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 Diversified Healthcare Trust (DHC), the current Sloan Ratio % is -12.14% as of Mar. 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 Diversified Healthcare Trust (DHC) Overvalued in 2026?
Based on GuruFocus' analysis, Diversified Healthcare Trust stock appears to be overvalued.
The current stock price of $9.16 is trading 186.3% above its estimated GF Value™ of $3.20.
GuruFocus considers Diversified Healthcare Trust to be Significantly Overvalued.
Key valuation signals for DHC:
Sloan Ratio %: -12.14%
GF Value™: $3.20 vs. price of $9.16 (186.3% above fair value)
No single metric tells the full story. See the DHC stock analysis page for a complete view including 30-year financials, guru trades, and insider activity.
Diversified Healthcare Trust is a real estate investment trust that focuses on healthcare-related properties, including life science estates, medical offices, and senior living communities. It acquires and owns properties and is engaged in the development and implementation of medical services and technologies. The company has two reportable segments: SHOP (Senior Housing Operating Portfolio) and Medical Office and Life Science Portfolio. The SHOP segment includes managed senior living communities providing residential living and care services. The Medical Office and Life Science Portfolio segment consists of properties leased to medical providers and biotechnology laboratories. It generates the majority of its revenue from the SHOP segment.
54GF 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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