Highlights

  • DiamondRock shows 158.00% one-year basic EPS growth, a P/E of 19.14 and PEG of -2.86.
  • Second quarter net income to common stockholders was $90,480 thousand, against $38,381 thousand.
  • Second quarter total revenues were $318,286 thousand, against $305,720 thousand; RevPAR rose 6.9%.
  • A $300 million repurchase program began May 1; $299.4 million of capacity remained July 30.

One-year earnings growth of 158.00%, paired with a trailing twelve-month P/E of 19.14 and an expected-basis PEG of -2.86, puts DiamondRock Hospitality (NASDAQ:DRH) among undervalued growth stocks, with shares trading at USD 14.23 on October 28, 2026, up 0.81%. In its latest disclosures, the lodging real estate investment trust authorized a $300 million share repurchase program in April, sold the Courtyard New York Manhattan/Fifth Avenue on May 1, and reported second quarter 2026 net income attributable to common stockholders of $90,480 thousand on July 30.

Based in Bethesda, Maryland, and incorporated in Maryland, DiamondRock Hospitality describes itself as a self-managed and self-administered lodging-focused REIT that owns premium hotels and resorts. As of June 30, 2026, it owned 34 hotels with 9,400 guest rooms in 26 markets in the United States. All of the hotels are managed by third-party operators, and nearly 40% of the portfolio operates as independent hotels. Its fiscal year ends December 31.

Growth: Second Quarter Earnings, Revenues and RevPAR

Net income attributable to common stockholders was $90,480 thousand in the second quarter against $38,381 thousand a year earlier, and $104,944 thousand for the six months against $47,784 thousand. Basic earnings per share were $0.44 against $0.19, and diluted earnings per share were $0.44 against $0.18. The second quarter included a gain on sale of hotel property of $31,591 thousand.

Total revenues were $318,286 thousand against $305,720 thousand, up 4.1%. Occupancy was 78.2% against 76.5%, ADR was $308.49 against $295.14, up 4.5%, and RevPAR was $241.17 against $225.67, up 6.9%.

Total hotel operating expenses were $205,683 thousand against $211,965 thousand; the company cited property tax appeal settlements at its Chicago properties, with a net benefit of $6.9 million.

Valuation: P/E of 19.14, PEG of -2.86 and FFO

The P/E ratio of 19.14 is measured on trailing twelve-month earnings, and the PEG ratio of -2.86 on an expected basis. The company reported FFO, a non-GAAP measure, of $88,008 thousand in the second quarter against $69,195 thousand, and Adjusted FFO available to common stock and unit holders of $91,832 thousand against $72,330 thousand. Adjusted EBITDA, also non-GAAP, was $107,890 thousand against $90,457 thousand.

Net cash provided by operations was $101.5 million for the six months. Total stockholders' equity was $1,523,355 thousand at June 30, 2026, against $1,447,885 thousand at December 31, 2025. Management states that its goal is to grow free cash flow per share while returning capital through share repurchases and dividends.

Capital and Balance Sheet: Repurchases, Dividends and Debt

The Board authorized the repurchase of up to $300 million of common stock in April 2026, effective May 1, 2026 and expiring May 1, 2028. In the six months, DiamondRock repurchased 189,265 shares at an average price of $9.79 for a total of $1.9 million. As of July 30, 2026, $299.4 million of capacity remained.

Dividends of $0.12 per share were paid on January 14, and $0.09 on each of April 14 and July 14, 2026.

Debt outstanding was $1.1 billion at June 30, 2026, with a weighted average interest rate of 4.90% including swaps. It consists of three unsecured term loans maturing from January 2028 to January 2030, and the company had no borrowings on its $400.0 million revolving credit facility. The portfolio is fully unencumbered by secured debt. Unrestricted cash was $106.0 million.

Disclosed Risks and Outlook for 2026

The company stated that its outlook for the rest of 2026 is subject to economic, geopolitical and market uncertainty, including conditions in the Middle East, inflationary pressures, labor market conditions and the timing and magnitude of interest rate changes. It also noted that period results are not directly comparable due to the 2025 and 2026 hotel sales.

Management fees rose 19.7% to $8,866 thousand in the second quarter, and unsecured term loan interest rose 25.2%. For the six months, Total RevPAR fell at several hotels, including Chico Hot Springs Resort & Day Spa at 14.2%, Havana Cabana Key West at 12.2% and The Hythe Vail at 8.3%. The company is subject to routine litigation and management believes uninsured liabilities will not have a material adverse impact.

DiamondRock expects to spend $75.0 million to $85.0 million on capital expenditures in 2026, against $40.3 million spent in the six months. It expects to begin renovating the entrance and lobby of the Westin San Diego Bayview in the third quarter and the guestrooms of the Atlanta Marriott Alpharetta in the fourth quarter of 2026. The 10-Q contains no earnings guidance.