Is Diamond Hill Investment Group, Inc. overvalued or undervalued?

As of 28 November 2025, the valuation grade for Diamond Hill Investment Group, Inc. has moved from fair to attractive, indicating a more favorable assessment of its value. The company is currently undervalued, with a P/E ratio of 9, which is significantly lower than its peer Crescent Capital BDC, Inc. that has a P/E of 13.31. Additionally, the EV to EBITDA ratio stands at 6.97, further suggesting that the company is trading at a discount relative to its earnings potential.
In comparison to its peers, Diamond Hill's EV to EBIT ratio of 7.13 is also lower than the industry average, reinforcing its undervaluation. The company's ROCE of 35.11% and ROE of 24.04% highlight strong profitability metrics, which are attractive for investors. However, the recent stock performance has been disappointing, with a year-to-date return of -23.92% compared to the S&P 500's positive return of 16.45%, indicating that the market has not yet recognized the underlying value of the company.