UNIVERSAL HEALTH SERVICES-B (NYSE:UHS) – A Potential Undervalued Opportunity in Healthcare

UNIVERSAL HEALTH SERVICES-B (NYSE:UHS) was identified as a decent value stock through our fundamental screening process. The company operates a network of hospitals and behavioral health facilities across the U.S. and internationally. With strong profitability metrics, reasonable financial health, and an attractive valuation, UHS may appeal to value-oriented investors.

Valuation Highlights

UHS stands out with a Valuation Rating of 9/10, indicating it is priced well below industry and market averages:

• P/E Ratio of 10.35 – Cheaper than 89% of its healthcare peers and significantly below the S&P 500 average (27.47).
• Forward P/E of 8.46 – Suggests further upside if earnings meet expectations.
• Low PEG Ratio – Reflects a reasonable price relative to expected earnings growth.

Profitability Strengths

The company earns a Profitability Rating of 7/10, supported by:

• Strong Margins: Operating margin of 10.87% and profit margin of 7.44%, outperforming most competitors.
• High ROIC (10.74%) – Indicates efficient capital deployment.
• Consistent Earnings Growth: EPS grew 49% over the past year, with a 5-year annualized growth rate of 10.7%.

Financial Health

UHS holds a Health Rating of 6/10, with manageable leverage and stable liquidity:

• Debt/Equity Ratio of 0.68 – In line with industry norms.
• Altman-Z Score of 3.05 – Signals low bankruptcy risk.
• Positive Free Cash Flow – Supports dividend sustainability.

Growth Outlook

While growth is moderate, UHS maintains a Growth Rating of 5/10:

• Revenue Growth (9.7% YoY) – Driven by demand for healthcare services.
• Expected EPS Growth (10.8% annually) – Suggests steady earnings expansion.

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

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.