Yahoo Finance DiamondRock Hospitality (NYSE:DRH shareholders incur further losses as stock declines 3.6% this week, taking five-year losses to 3.6%
The main aim of stock picking is to find the market-beating stocks. But the main game is to find enough winners to more than offset the losers At this point some shareholders may be questioning their investment in DiamondRock Hospitality Company (NYSE:DRH), since the last five years saw the share price fall 15%.
With the stock having lost 3.6% in the past week, it's worth taking a look at business performance and seeing if there's any red flags.
View our latest analysis for DiamondRock Hospitality
DiamondRock Hospitality isn't currently profitable, so most analysts would look to revenue growth to get an idea of how fast the underlying business is growing. Shareholders of unprofitable companies usually expect strong revenue growth. Some companies are willing to postpone profitability to grow revenue faster, but in that case one does expect good top-line growth.
In the last five years DiamondRock Hospitality saw its revenue shrink by 15% per year. That puts it in an unattractive cohort, to put it mildly. On the face of it we'd posit the share price fall of 3% compound, over five years is well justified by the fundamental deterioration. We doubt many shareholders are delighted with this share price performance. Risk averse investors probably wouldn't like this one much.
The graphic below depicts how earnings and revenue have changed over time (unveil the exact values by clicking on the image).
This free interactive report on DiamondRock Hospitality's balance sheet strength is a great place to start, if you want to investigate the stock further.
What about the Total Shareholder Return (TSR)?
We've already covered DiamondRock Hospitality's share price action, but we should also mention its total shareholder return (TSR). Arguably the TSR is a more complete return calculation because it accounts for the value of dividends (as if they were reinvested), along with the hypothetical value of any discounted capital that have been offered to shareholders. Its history of dividend payouts mean that DiamondRock Hospitality's TSR, which was a 3.6% drop over the last 5 years, was not as bad as the share price return.
A Different Perspective
We're pleased to report that DiamondRock Hospitality shareholders have received a total shareholder return of 1.0% over one year. There's no doubt those recent returns are much better than the TSR loss of 0.7% per year over five years. This makes us a little wary, but the business might have turned around its fortunes. While it is well worth considering the different impacts that market conditions can have on the share price, there are other factors that are even more important. To that end, you should be aware of the 1 warning sign we've spotted with DiamondRock Hospitality .
If you are like me, then you will not want to miss this free list of growing companies that insiders are buying.
Please note, the market returns quoted in this article reflect the market weighted average returns of stocks that currently trade on US exchanges.
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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
