Universal Health Services-B (NYSE:UHS) – An Undervalued Stock with Solid Fundamentals

Universal Health Services-B (NYSE:UHS) stands out as a potential opportunity for value investors, according to our fundamental screening criteria. The company operates hospitals and behavioral healthcare facilities across the U.S. and internationally, demonstrating stable financials and an attractive valuation.

Valuation Highlights

• Low P/E Ratio: UHS trades at a P/E of 10.47, significantly below both the industry average (35.68) and the S&P 500 (25.91).
• Price/Forward Earnings: At 8.60, this suggests the stock is priced reasonably relative to future earnings expectations.
• Enterprise Value/EBITDA: The ratio indicates UHS is cheaper than 82% of its peers in the healthcare sector.

Financial Health

• Stable Solvency: An Altman-Z score of 3.06 suggests low bankruptcy risk, and the company has reduced its debt/assets ratio compared to last year.
• Liquidity: Current and quick ratios (1.32 and 1.23, respectively) indicate sufficient short-term financial flexibility.

Profitability

• Strong Margins: Operating margin of 10.87% and profit margin of 7.44% outperform most industry peers.
• ROIC Improvement: Return on invested capital has increased to 10.74%, signaling better capital efficiency.

Growth Prospects

• Earnings Growth: EPS grew 49.29% over the past year, with an expected annualized growth of 13.23% in the coming years.
• Revenue Stability: Revenue has grown steadily at 6.82% annually, with projections for continued mid-single-digit growth.

Our Decent Value Stocks screener lists more stocks with similar characteristics. For a deeper dive, review the full fundamental report on UHS.

Disclaimer

This is not investment advice. Always conduct your own research before making investment decisions.