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Relative valuation derived from Financials sector median benchmarks. Model weights: EV/EBITDA (40%), P/B (35%), P/S (25%). Multiples adjusted for extreme outliers and non-recurring volatility.
Auditing capital efficiency...
Quality Profile Audit
Score: 61.5GRADE B
Composite assessment of profitability, capital efficiency, and financial strength. Top-tier entities demonstrate sustainable cash flow generation.
Return on Equity
Profit generated per dollar of shareholder equity
7.0%
Sector: 8.5%
Dividend Analysis audit
INCOME
5.90%
Trailing Yield
$5.90
Per $100 Invested
Solid dividend yield for income-focused strategies.
Est. Payout Ratio
111%HIGH
Analyst Projections
Analyst Consensus
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Based on our 6-factor quantitative model, DiamondRock Hospitality Co (DRH) receives a "Hold" rating with a composite score of 53.3/100, ranked #806 out of 4446 stocks. Key factor scores: Quality 62/100, Value 62/100, Momentum 56/100. This is quantitative analysis only — not investment advice.
DiamondRock Hospitality Co (DRH) Stock Analysis — April 2026 Rating, Price, and Forecast
Company Overview — What Does DiamondRock Hospitality Co Do?
DiamondRock Hospitality Company is a self-advised real estate investment trust (REIT) that is an owner of a leading portfolio of geographically diversified hotels concentrated in top gateway markets and destination resort locations. The Company owns 31 premium quality hotels with over 10,000 rooms. The Company has strategically positioned its hotels to be operated both under leading global brand families as well as unique boutique hotels in the lifestyle segment. DiamondRock Hospitality Co (DRH) is classified as a small-cap stock in the Financials sector, specifically within the Trading industry. The company is led by CEO Mark W. Brugger and employs approximately 30 people, headquartered in BETHESDA, Maryland. With a market capitalization of $1.9B, DRH is one of the notable companies in the Financials sector.
DiamondRock Hospitality Co (DRH) Stock Rating — Hold (April 2026)
As of April 2026, DiamondRock Hospitality Co receives a Hold rating with a composite score of 53.3/100 and 3 out of 5 stars from the Blank Capital Research quantitative model.DRH ranks #806 out of 4,446 stocks in our coverage universe. Within the Financials sector, DiamondRock Hospitality Co ranks #241 of 891 stocks, placing it in the upper half of its Financials peers. The rating is generated by a multi-factor model that weighs quality (30%), momentum (25%), value (15%), investment (10%), stability (10%), and short interest (10%).
DRH Stock Price and 52-Week Range
DiamondRock Hospitality Co (DRH) currently trades at $10.15. The stock gained $0.07 (0.7%) in the most recent trading session. The 52-week high for DRH is $10.67, which means the stock is currently trading -4.8% from its annual peak. The 52-week low is $6.18, putting the stock 64.2% above its annual trough. Recent trading volume was 1.1M shares, reflecting moderate market activity.
Is DRH Overvalued or Undervalued? — Valuation Analysis
DiamondRock Hospitality Co (DRH) carries a value factor score of 62/100 in the Blank Capital model, indicating fair valuation relative to historical norms. The trailing price-to-earnings ratio is 18.85x, compared to the Financials sector average of 14.88x — a premium of 27%. The price-to-book ratio stands at 1.32x, versus the sector average of 1.22x. The price-to-sales ratio is 1.70x, compared to 0.90x for the average Financials stock. On an enterprise value basis, DRH trades at 18.04x EV/EBITDA, versus 3.26x for the sector.
Overall, DRH's valuation appears roughly in line with sector benchmarks, suggesting the market is pricing the stock fairly given its current fundamentals and growth trajectory. Neither deep value nor significantly overpriced, the stock occupies a middle ground on valuation.
DiamondRock Hospitality Co Profitability — ROE, Margins, and Quality Score
DiamondRock Hospitality Co (DRH) earns a quality factor score of 62/100, indicating solid business quality with consistent operational execution. The return on equity (ROE) is 7.0%, compared to the Financials sector average of 8.5%, which is below typical expectations for high-quality companies. Return on assets (ROA) comes in at 3.4% versus the sector average of 1.2%.
On a margin basis, DiamondRock Hospitality Co reports gross margins of 28.6%. The operating margin is 14.6% (sector: 21.8%). Net profit margin stands at 8.8%, versus 17.7% for the average Financials stock. Revenue growth is running at -7.7% on a trailing basis, compared to 9.4% for the sector. The overall profitability profile is adequate, though there may be room for margin expansion.
DRH Debt, Balance Sheet, and Financial Health
DiamondRock Hospitality Co has a debt-to-equity ratio of 75.0%, compared to the Financials sector average of 121.0%. Leverage is within a manageable range for the industry, though investors should monitor debt trends over time. The current ratio is 1.94x, suggesting adequate working capital coverage. Total debt on the balance sheet is $1.10B. Cash and equivalents stand at $145M.
DRH has a beta of 0.97, meaning it is roughly in line with the broader market in terms of price volatility. The stability factor score for DiamondRock Hospitality Co is 73/100, indicating low-volatility characteristics and consistent price behavior that appeals to risk-averse investors.
DiamondRock Hospitality Co Revenue and Earnings History — Quarterly Trend
In TTM 2026, DiamondRock Hospitality Co reported revenue of $1.13B and earnings per share (EPS) of $0.44. Net income for the quarter was $102M. Operating income came in at $168M.
In FY 2025, DiamondRock Hospitality Co reported revenue of $1.12B and earnings per share (EPS) of $0.44. Net income for the quarter was $102M. Revenue grew -0.8% year-over-year compared to FY 2024. Operating income came in at $163M.
In Q3 2025, DiamondRock Hospitality Co reported revenue of $285M and earnings per share (EPS) of $0.10. Net income for the quarter was $23M. Revenue grew 0.1% year-over-year compared to Q3 2024. Operating income came in at $44M.
In Q2 2025, DiamondRock Hospitality Co reported revenue of $306M and earnings per share (EPS) of $0.19. Net income for the quarter was $41M. Revenue grew -1.2% year-over-year compared to Q2 2024. Operating income came in at $56M.
Over the past 8 quarters, DiamondRock Hospitality Co has demonstrated a growth trajectory, with revenue expanding from $309M to $1.13B. Investors analyzing DRH stock should weigh these quarterly trends alongside the valuation and quality metrics discussed above.
DRH Dividend Yield and Income Analysis
DiamondRock Hospitality Co (DRH) currently pays a dividend yield of 5.9%. At this yield, a $10,000 investment in DRH stock would generate approximately $$590.00 in annual dividend income. This compares to the Financials sector average dividend yield of 2.5%, meaning DRH offers above-average income for its sector. The net margin of 8.8% provides reasonable coverage for the dividend, though investors should monitor payout sustainability.
DRH Momentum and Technical Analysis Profile
DiamondRock Hospitality Co (DRH) has a momentum factor score of 56/100, reflecting neutral trend characteristics. The stock is neither significantly outperforming nor underperforming the broader market on a momentum basis. The investment factor score is 36/100, which measures capital allocation efficiency and asset growth patterns. The short interest score of 6/100 signals elevated short interest, which can indicate bearish sentiment among institutional investors.
DRH vs Competitors — Financials Sector Ranking and Peer Comparison
Comparing DRH against the S&P 500 benchmark is also instructive for understanding relative performance. Investors can view the full DRH vs S&P 500 (SPY) comparison to assess how DiamondRock Hospitality Co stacks up against the broader market across all factor dimensions.
DRH Next Earnings Date
No upcoming earnings date has been announced for DiamondRock Hospitality Co (DRH) at this time. Check the earnings calendar for the latest scheduling updates across all stocks in our coverage universe.
Should You Buy DRH? — Investment Thesis Summary
DiamondRock Hospitality Co presents a balanced picture with arguments on both sides. The quality score of 62/100 indicates above-average profitability and business fundamentals. The value score of 62/100 suggests attractive pricing relative to fundamentals. Low volatility (stability score 73/100) reduces downside risk.
In summary, DiamondRock Hospitality Co (DRH) earns a Hold rating with a composite score of 53.3/100 as of April 2026. The rating is derived from the Blank Capital Research methodology, which combines six factor dimensions into a single quantitative ranking. Investors should consider these quantitative signals alongside their own fundamental research, risk tolerance, and investment time horizon before making buy or sell decisions on DRH stock.
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Institutional Research Dossier
DiamondRock Hospitality Co (DRH) Deep Dive Analysis
Published on March 24, 2026
Action RatingHold
Sections
Executive Summary
DiamondRock Hospitality Company (DRH) is a leading real estate investment trust (REIT) that owns a diversified portfolio of premium hotels primarily located in top gateway markets and destination resort locations. The company's BCR Action rating is Hold, reflecting its solid profitability and stability metrics but relatively weaker investment and momentum factors. The key takeaway is that while DRH's fundamental quality appears attractive, its valuation and growth outlook may not fully justify an outperform rating at this time.
Business Strategy & Overview
DiamondRock Hospitality is a self-advised REIT that owns a portfolio of 31 high-quality hotels with over 10,000 rooms. The company's strategic focus is to acquire and own premium-branded hotels in key gateway cities and resort destinations across the United States. DRH partners with leading global hotel brands such as Marriott, Hilton, and Hyatt, as well as operates some unique boutique hotels in the lifestyle segment.
The company's business model is to generate stable rental income and capital appreciation from its hotel portfolio. DRH acquires well-located properties, renovates and repositions them as needed, and then leases the hotels to third-party operators who are responsible for managing day-to-day operations. This asset-light approach allows DRH to focus on strategic capital allocation and portfolio optimization.
The hospitality industry has faced significant headwinds in recent years due to the COVID-19 pandemic, which severely disrupted travel and hotel demand. However, DRH's geographically diverse portfolio and focus on premium-branded properties have helped the company weather the storm better than many of its peers. As the travel industry continues to recover, DRH is well-positioned to benefit from increased leisure and business travel demand.
Execution Benchmarks audit
Revenue Growth
YOY expansion rate
-7.7%
Sector: 9.4%
-182% VS SCTR
Economic Moat Analysis
DiamondRock Hospitality's economic moat can be characterized as narrow. The company's primary competitive advantages stem from its strategic portfolio of high-quality hotel assets in desirable locations, as well as its relationships with leading global hotel brands. DRH's properties are typically located in top-tier gateway cities and resort destinations, which provides them with a degree of exclusivity and pricing power.
Additionally, the company's partnerships with major hotel chains, such as Marriott and Hilton, grant DRH access to extensive distribution networks, customer loyalty programs, and operational expertise. This helps the company attract and retain a steady flow of guests, as well as maintain high occupancy rates and profit margins.
However, the hotel industry is highly competitive, with low barriers to entry and significant rivalry from both branded and independent operators. While DRH's portfolio of premium assets and brand partnerships provide some differentiation, these advantages can be replicated by competitors, limiting the company's long-term sustainable edge. Furthermore, the cyclical nature of the hospitality industry and the threat of oversupply in certain markets can also erode DRH's pricing power and profitability.
Financial Health & Profitability
DiamondRock Hospitality's financial health appears to be solid, but with some areas of concern. The company's revenue growth has been relatively weak, declining by an average of 7.7% over the past few years, underperforming the sector average of 9.3% growth. This reflects the impact of the COVID-19 pandemic on the hospitality industry.
However, DRH's profitability metrics are relatively strong, with a gross margin of 28.7% compared to the sector average of 0.0%, and an operating margin of 14.6% versus the sector's 22.0%. The company's return on equity (ROE) of 7.0% is lower than the sector's 8.5%, but still indicates a reasonable level of capital efficiency.
DiamondRock's balance sheet appears to be moderately leveraged, with a debt-to-equity ratio of 75.0% compared to the sector average of 115.0%. The company's current ratio of 1.94 suggests adequate liquidity to meet short-term obligations. However, the lack of available free cash flow data makes it difficult to assess the company's long-term cash flow generation capabilities.
Valuation Assessment
DiamondRock Hospitality's valuation appears to be somewhat elevated compared to its peers. The company's P/E ratio of 20.9x is significantly higher than the sector average of 15.5x, and its EV/EBITDA multiple of 4.6x is also above the sector's 3.5x. This suggests that the market may be pricing in a relatively optimistic growth and profitability outlook for DRH.
However, it's worth noting that the company's valuation metrics have improved in recent quarters, as the hospitality industry's recovery from the pandemic has gained momentum. DRH's Q2 2025 financial results, with an 18.4% operating margin and 0.18 EPS, indicate that the company may be on a path to stronger financial performance.
While the current valuation appears somewhat rich, a deeper analysis of DRH's long-term growth potential, capital allocation strategies, and ability to maintain its competitive positioning in the industry would be necessary to determine if the stock is truly undervalued or overvalued. The company's relatively low free cash flow yield is also a potential concern that merits further investigation.
Risk & Uncertainty
The primary risks facing DiamondRock Hospitality are related to the cyclical and competitive nature of the hospitality industry, as well as the company's relatively high leverage. The hotel sector is highly sensitive to macroeconomic conditions, and any slowdown in travel demand or economic growth could significantly impact DRH's occupancy rates, revenue, and profitability.
Additionally, the company faces intense competition from both branded and independent hotel operators, which could pressure its ability to maintain market share and pricing power. DRH's reliance on partnerships with major hotel chains also exposes it to the risk of potentially losing these valuable relationships or facing unfavorable changes in the terms of these agreements.
The company's relatively high debt load, with a debt-to-equity ratio of 75.0%, could also limit its financial flexibility and make it more vulnerable to rising interest rates or a downturn in the market. Any unexpected shocks or disruptions to the company's operations or the broader hospitality industry could potentially strain DRH's balance sheet and cash flow generation.
Bulls Say / Bears Say
The Bull Case
BULL VIEWDRH's portfolio of premium-branded hotels in top-tier markets provides the company with a strong competitive advantage and the ability to command higher room rates and occupancy levels, driving superior profitability.
BULL VIEWThe ongoing recovery in the hospitality industry, coupled with DRH's focus on strategic capital allocation and portfolio optimization, positions the company for accelerated growth and improved financial performance in the coming years.
The Bear Case
BEAR VIEWThe hospitality industry remains highly cyclical and vulnerable to macroeconomic headwinds, which could negatively impact DRH's occupancy rates, revenue, and profitability, especially given the company's relatively high leverage.
BEAR VIEWDRH's premium-branded hotel strategy and reliance on major chain partnerships may not provide a sustainable competitive advantage, as competitors can replicate these advantages, leading to increased pricing pressure and market share erosion.
About the Author
Marques Blank
Founder & Chief Investment Officer, Blank Capital
Marques brings 15 years of institutional finance and investing experience, having overseen financial planning for a $1.6B defense business unit. He developed the proprietary 6-factor quantitative model used to score DRH and 4,400+ other equities.
DiamondRock Hospitality Co exhibits a 144% valuation premium relative to institutional benchmarks. This represents a potential valuation overextension based on current multiples.
Return on Assets
Efficiency of asset utilization
3.4%
Sector: 1.2%
Gross Margin
Pricing power and cost efficiency
28.6%
Sector: 0.0%
Operating Margin
Core business profitability
14.6%
Sector: 21.8%
Net Margin
Bottom-line profitability
8.8%
Sector: 17.7%
Factor Methodology
The Quality factor evaluates the persistence and magnitude of cash flows. Companies with scores >70 exhibit superior competitive moats and financial resilience through economic cycles.
Sector Avg Yield2.48%
Yield Delta+138%
Income Projection audit
A $10,000 investment would generate approximately $590 annually in dividends at the current trailing rate.
