QUEST DIAGNOSTICS INC (NYSE:DGX) - A Reliable Dividend Stock With Strong Fundamentals

QUEST DIAGNOSTICS INC (NYSE:DGX) stands out as a solid choice for dividend investors, according to our screening criteria. The company combines a strong dividend profile with healthy profitability and financial stability, making it worth a closer look for income-focused portfolios.

Dividend Strength

• Consistent Payouts: DGX has maintained dividend payments for at least 10 years without reductions, demonstrating reliability.
• Growing Dividends: The company has increased its dividend at an average annual rate of 6.92%, outpacing inflation.
• Sustainable Payout Ratio: With a payout ratio of 37.67%, DGX retains enough earnings to reinvest in growth while rewarding shareholders.
• Competitive Yield: The current 1.87% yield is slightly below the S&P 500 average but better than 89% of its industry peers.

Profitability & Financial Health

• Strong Margins: DGX’s 8.78% profit margin and 14.35% operating margin outperform most competitors.
• Solid Returns: The company delivers a 12.87% return on equity and 7.86% return on invested capital, indicating efficient capital use.
• Balanced Debt: While DGX carries some debt (Debt/Equity of 0.85), its Altman-Z score of 3.10 suggests low bankruptcy risk.

Valuation & Growth

• Reasonable Valuation: Trading at 18.18x earnings, DGX is cheaper than 72% of its industry peers.
• Steady Growth: Revenue has grown 9.38% over the past year, with earnings expected to increase 8.57% annually in the coming years.

For a deeper dive into DGX’s financials, review the full fundamental report here.

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Disclaimer

This is not investing advice! The article highlights observations at the time of writing, but you should conduct your own analysis before making investment decisions.