QUEST DIAGNOSTICS INC (DGX) Stock Fundamental Analysis
NYSE:DGX - US74834L1008 - Common Stock
180.23 USD
-3.49 (-1.9%)
180.23 USD
0 (0%)
We assign a fundamental rating of 5 out of 10 to DGX. DGX was compared to 101 industry peers in the Health Care Providers & Services industry. DGX has an excellent profitability rating, but there are some minor concerns on its financial health. DGX has a decent growth rate and is not valued too expensively. Finally DGX also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year DGX was profitable.
In the past year DGX had a positive cash flow from operations.
DGX had positive earnings in each of the past 5 years.
Each year in the past 5 years DGX had a positive operating cash flow.
1.2 Ratios
Looking at the Return On Assets, with a value of 5.92%, DGX belongs to the top of the industry, outperforming 83.17% of the companies in the same industry.
DGX's Return On Equity of 13.09% is amongst the best of the industry. DGX outperforms 80.20% of its industry peers.
DGX has a Return On Invested Capital of 8.59%. This is in the better half of the industry: DGX outperforms 75.25% of its industry peers.
The Average Return On Invested Capital over the past 3 years for DGX is in line with the industry average of 9.15%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.92% | ||
| ROE | 13.09% | ||
| ROIC | 8.59% |
ROA(3y)6.25%
ROA(5y)8.71%
ROE(3y)14.08%
ROE(5y)18.83%
ROIC(3y)8.77%
ROIC(5y)10.97%
1.3 Margins
DGX has a Profit Margin of 8.99%. This is amongst the best in the industry. DGX outperforms 91.09% of its industry peers.
In the last couple of years the Profit Margin of DGX has declined.
DGX's Operating Margin of 14.70% is amongst the best of the industry. DGX outperforms 87.13% of its industry peers.
DGX's Operating Margin has declined in the last couple of years.
Looking at the Gross Margin, with a value of 33.23%, DGX is in the better half of the industry, outperforming 64.36% of the companies in the same industry.
DGX's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.7% | ||
| PM (TTM) | 8.99% | ||
| GM | 33.23% |
OM growth 3Y-14.9%
OM growth 5Y-3.56%
PM growth 3Y-21.92%
PM growth 5Y-4.54%
GM growth 3Y-5.79%
GM growth 5Y-1.22%
2. Health
2.1 Basic Checks
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so DGX is still creating some value.
The number of shares outstanding for DGX remains at a similar level compared to 1 year ago.
Compared to 5 years ago, DGX has less shares outstanding
Compared to 1 year ago, DGX has a worse debt to assets ratio.
2.2 Solvency
DGX has an Altman-Z score of 3.22. This indicates that DGX is financially healthy and has little risk of bankruptcy at the moment.
DGX has a better Altman-Z score (3.22) than 67.33% of its industry peers.
DGX has a debt to FCF ratio of 4.63. This is a neutral value as DGX would need 4.63 years to pay back of all of its debts.
DGX has a better Debt to FCF ratio (4.63) than 72.28% of its industry peers.
DGX has a Debt/Equity ratio of 0.72. This is a neutral value indicating DGX is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.72, DGX is in line with its industry, outperforming 49.51% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 4.63 | ||
| Altman-Z | 3.22 |
ROIC/WACC1.1
WACC7.83%
2.3 Liquidity
DGX has a Current Ratio of 1.09. This is a normal value and indicates that DGX is financially healthy and should not expect problems in meeting its short term obligations.
Looking at the Current ratio, with a value of 1.09, DGX is doing worse than 67.33% of the companies in the same industry.
DGX has a Quick Ratio of 1.09. This is a bad value and indicates that DGX is not financially healthy enough and could expect problems in meeting its short term obligations.
Looking at the Quick ratio, with a value of 0.99, DGX is doing worse than 68.32% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.99 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 7.99% over the past year.
DGX shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.58% yearly.
The Revenue has grown by 12.58% in the past year. This is quite good.
Measured over the past years, DGX shows a small growth in Revenue. The Revenue has been growing by 5.02% on average per year.
EPS 1Y (TTM)7.99%
EPS 3Y-14.1%
EPS 5Y6.58%
EPS Q2Q%11.49%
Revenue 1Y (TTM)12.58%
Revenue growth 3Y-2.91%
Revenue growth 5Y5.02%
Sales Q2Q%15.19%
3.2 Future
DGX is expected to show a small growth in Earnings Per Share. In the coming years, the EPS will grow by 7.26% yearly.
The Revenue is expected to grow by 4.74% on average over the next years.
EPS Next Y9.14%
EPS Next 2Y7.75%
EPS Next 3Y7.93%
EPS Next 5Y7.26%
Revenue Next Year10.48%
Revenue Next 2Y6.89%
Revenue Next 3Y5.83%
Revenue Next 5Y4.74%
3.3 Evolution
The EPS growth rate is stable: in the next years the growth will be about the same than in the last years.
When comparing the Revenue growth rate of the last years to the growth rate of the upcoming years, we see that the growth is stable.
4. Valuation
4.1 Price/Earnings Ratio
With a Price/Earnings ratio of 19.05, DGX is valued on the expensive side.
Based on the Price/Earnings ratio, DGX is valued a bit cheaper than 73.27% of the companies in the same industry.
DGX's Price/Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 27.24.
DGX is valuated rather expensively with a Price/Forward Earnings ratio of 17.21.
Based on the Price/Forward Earnings ratio, DGX is valued a bit cheaper than the industry average as 69.31% of the companies are valued more expensively.
When comparing the Price/Forward Earnings ratio of DGX to the average of the S&P500 Index (22.81), we can say DGX is valued slightly cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.05 | ||
| Fwd PE | 17.21 |
4.2 Price Multiples
62.38% of the companies in the same industry are more expensive than DGX, based on the Enterprise Value to EBITDA ratio.
DGX's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. DGX is cheaper than 73.27% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.47 | ||
| EV/EBITDA | 12.2 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
The decent profitability rating of DGX may justify a higher PE ratio.
PEG (NY)2.08
PEG (5Y)2.9
EPS Next 2Y7.75%
EPS Next 3Y7.93%
5. Dividend
5.1 Amount
DGX has a Yearly Dividend Yield of 1.74%.
DGX's Dividend Yield is rather good when compared to the industry average which is at 2.51. DGX pays more dividend than 88.12% of the companies in the same industry.
DGX's Dividend Yield is slightly below the S&P500 average, which is at 2.34.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.74% |
5.2 History
On average, the dividend of DGX grows each year by 6.92%, which is quite nice.
DGX has been paying a dividend for at least 10 years, so it has a reliable track record.
DGX has not decreased its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)6.92%
Div Incr Years13
Div Non Decr Years20
5.3 Sustainability
DGX pays out 36.15% of its income as dividend. This is a sustainable payout ratio.
The dividend of DGX is growing around the same rate as the earnings are growing. If this keeps up the dividend growth is sustainable.
DP36.15%
EPS Next 2Y7.75%
EPS Next 3Y7.93%
180.23
-3.49 (-1.9%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners95.02%
Inst Owner Change-3.32%
Ins Owners0.31%
Ins Owner Change-0.5%
Market Cap20.15B
Analysts76.67
Price Target190.72 (5.82%)
Short Float %4.26%
Short Ratio4.48
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.74% |
Yearly Dividend2.98
Dividend Growth(5Y)6.92%
DP36.15%
Div Incr Years13
Div Non Decr Years20
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)1.32%
Min EPS beat(2)0.93%
Max EPS beat(2)1.7%
EPS beat(4)4
Avg EPS beat(4)2.25%
Min EPS beat(4)0.8%
Max EPS beat(4)5.56%
EPS beat(8)7
Avg EPS beat(8)2.31%
EPS beat(12)11
Avg EPS beat(12)2.55%
EPS beat(16)15
Avg EPS beat(16)4.97%
Revenue beat(2)1
Avg Revenue beat(2)0.09%
Min Revenue beat(2)-0.15%
Max Revenue beat(2)0.33%
Revenue beat(4)3
Avg Revenue beat(4)0.63%
Min Revenue beat(4)-0.15%
Max Revenue beat(4)1.68%
Revenue beat(8)6
Avg Revenue beat(8)0.61%
Revenue beat(12)10
Avg Revenue beat(12)1.64%
Revenue beat(16)13
Avg Revenue beat(16)2.22%
PT rev (1m)1.29%
PT rev (3m)1.29%
EPS NQ rev (1m)0.45%
EPS NQ rev (3m)0.56%
EPS NY rev (1m)0.53%
EPS NY rev (3m)0.51%
Revenue NQ rev (1m)0.11%
Revenue NQ rev (3m)1.14%
Revenue NY rev (1m)0.7%
Revenue NY rev (3m)0.67%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.05 | ||
| Fwd PE | 17.21 | ||
| P/S | 1.92 | ||
| P/FCF | 16.47 | ||
| P/OCF | 12.01 | ||
| P/B | 2.79 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.2 |
EPS(TTM)9.46
EY5.25%
EPS(NY)10.47
Fwd EY5.81%
FCF(TTM)10.95
FCFY6.07%
OCF(TTM)15.01
OCFY8.33%
SpS94.1
BVpS64.64
TBVpS-30.06
PEG (NY)2.08
PEG (5Y)2.9
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.92% | ||
| ROE | 13.09% | ||
| ROCE | 11.09% | ||
| ROIC | 8.59% | ||
| ROICexc | 8.79% | ||
| ROICexgc | 39.43% | ||
| OM | 14.7% | ||
| PM (TTM) | 8.99% | ||
| GM | 33.23% | ||
| FCFM | 11.63% |
ROA(3y)6.25%
ROA(5y)8.71%
ROE(3y)14.08%
ROE(5y)18.83%
ROIC(3y)8.77%
ROIC(5y)10.97%
ROICexc(3y)9.13%
ROICexc(5y)11.7%
ROICexgc(3y)38.8%
ROICexgc(5y)46.51%
ROCE(3y)11.44%
ROCE(5y)14.33%
ROICexcg growth 3Y-18.68%
ROICexcg growth 5Y-6.38%
ROICexc growth 3Y-22.78%
ROICexc growth 5Y-5.24%
OM growth 3Y-14.9%
OM growth 5Y-3.56%
PM growth 3Y-21.92%
PM growth 5Y-4.54%
GM growth 3Y-5.79%
GM growth 5Y-1.22%
F-Score6
Asset Turnover0.66
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.72 | ||
| Debt/FCF | 4.63 | ||
| Debt/EBITDA | 2.47 | ||
| Cap/Depr | 83.61% | ||
| Cap/Sales | 4.31% | ||
| Interest Coverage | 5.12 | ||
| Cash Conversion | 80.29% | ||
| Profit Quality | 129.39% | ||
| Current Ratio | 1.09 | ||
| Quick Ratio | 0.99 | ||
| Altman-Z | 3.22 |
F-Score6
WACC7.83%
ROIC/WACC1.1
Cap/Depr(3y)90.53%
Cap/Depr(5y)97.23%
Cap/Sales(3y)4.27%
Cap/Sales(5y)4.19%
Profit Quality(3y)115.37%
Profit Quality(5y)109.91%
High Growth Momentum
Growth
EPS 1Y (TTM)7.99%
EPS 3Y-14.1%
EPS 5Y6.58%
EPS Q2Q%11.49%
EPS Next Y9.14%
EPS Next 2Y7.75%
EPS Next 3Y7.93%
EPS Next 5Y7.26%
Revenue 1Y (TTM)12.58%
Revenue growth 3Y-2.91%
Revenue growth 5Y5.02%
Sales Q2Q%15.19%
Revenue Next Year10.48%
Revenue Next 2Y6.89%
Revenue Next 3Y5.83%
Revenue Next 5Y4.74%
EBIT growth 1Y17.29%
EBIT growth 3Y-17.38%
EBIT growth 5Y1.28%
EBIT Next Year44.58%
EBIT Next 3Y16.91%
EBIT Next 5YN/A
FCF growth 1Y39.41%
FCF growth 3Y-20.8%
FCF growth 5Y1.52%
OCF growth 1Y22.13%
OCF growth 3Y-15.78%
OCF growth 5Y1.42%