QUEST DIAGNOSTICS INC (DGX) Stock Fundamental Analysis
NYSE:DGX - New York Stock Exchange, Inc. - US74834L1008 - Common Stock - Currency: USD
DGX gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 102 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 correct valuation and a medium growth rate. DGX also has an excellent dividend rating. These ratings would make DGX suitable for dividend investing!
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.
In the past 5 years DGX has always been profitable.
DGX had a positive operating cash flow in each of the past 5 years.
1.2 Ratios
With an excellent Return On Assets value of 5.65%, DGX belongs to the best of the industry, outperforming 82.35% of the companies in the same industry.
Looking at the Return On Equity, with a value of 12.87%, DGX belongs to the top of the industry, outperforming 80.39% of the companies in the same industry.
DGX has a Return On Invested Capital of 7.86%. This is in the better half of the industry: DGX outperforms 74.51% 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 9.53%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.65% | ||
| ROE | 12.87% | ||
| ROIC | 7.86% |
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 better Profit Margin (8.78%) than 92.16% of its industry peers.
DGX's Profit Margin has declined in the last couple of years.
DGX's Operating Margin of 14.35% is amongst the best of the industry. DGX outperforms 86.27% of its industry peers.
In the last couple of years the Operating Margin of DGX has declined.
The Gross Margin of DGX (33.15%) is better than 61.76% of its industry peers.
DGX's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.35% | ||
| PM (TTM) | 8.78% | ||
| GM | 33.15% |
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
DGX has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is 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 3.18. This indicates that DGX is financially healthy and has little risk of bankruptcy at the moment.
DGX's Altman-Z score of 3.18 is fine compared to the rest of the industry. DGX outperforms 68.63% of its industry peers.
The Debt to FCF ratio of DGX is 5.55, which is a neutral value as it means it would take DGX, 5.55 years of fcf income to pay off all of its debts.
DGX has a Debt to FCF ratio of 5.55. This is in the better half of the industry: DGX outperforms 61.76% of its industry peers.
DGX has a Debt/Equity ratio of 0.85. This is a neutral value indicating DGX is somewhat dependend on debt financing.
DGX has a Debt to Equity ratio of 0.85. This is comparable to the rest of the industry: DGX outperforms 42.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.85 | ||
| Debt/FCF | 5.55 | ||
| Altman-Z | 3.18 |
ROIC/WACC1
WACC7.89%
2.3 Liquidity
A Current Ratio of 1.44 indicates that DGX should not have too much problems paying its short term obligations.
Looking at the Current ratio, with a value of 1.44, DGX is in line with its industry, outperforming 50.00% of the companies in the same industry.
DGX has a Quick Ratio of 1.31. This is a normal value and indicates that DGX is financially healthy and should not expect problems in meeting its short term obligations.
DGX has a Quick ratio (1.31) which is in line with its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.44 | ||
| Quick Ratio | 1.31 |
3. Growth
3.1 Past
DGX shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 5.51%.
The Earnings Per Share has been growing slightly by 6.58% on average over the past years.
Looking at the last year, DGX shows a quite strong growth in Revenue. The Revenue has grown by 9.38% in the last year.
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)5.51%
EPS 3Y-14.1%
EPS 5Y6.58%
EPS Q2Q%8.33%
Revenue 1Y (TTM)9.38%
Revenue growth 3Y-2.91%
Revenue growth 5Y5.02%
Sales Q2Q%12.09%
3.2 Future
DGX is expected to show quite a strong growth in Earnings Per Share. In the coming years, the EPS will grow by 8.82% yearly.
The Revenue is expected to grow by 4.66% on average over the next years.
EPS Next Y8.59%
EPS Next 2Y8.6%
EPS Next 3Y8.35%
EPS Next 5Y8.82%
Revenue Next Year9.75%
Revenue Next 2Y6.85%
Revenue Next 3Y5.78%
Revenue Next 5Y4.66%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better than in the last years.
The Revenue growth rate is stable: in the next years the growth will be about the same than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
A Price/Earnings ratio of 19.39 indicates a rather expensive valuation of DGX.
Based on the Price/Earnings ratio, DGX is valued a bit cheaper than 70.59% of the companies in the same industry.
The average S&P500 Price/Earnings ratio is at 26.60. DGX is valued slightly cheaper when compared to this.
Based on the Price/Forward Earnings ratio of 16.76, the valuation of DGX can be described as correct.
Based on the Price/Forward Earnings ratio, DGX is valued a bit cheaper than the industry average as 70.59% of the companies are valued more expensively.
Compared to an average S&P500 Price/Forward Earnings ratio of 22.43, DGX is valued a bit cheaper.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.39 | ||
| Fwd PE | 16.76 |
4.2 Price Multiples
DGX's Enterprise Value to EBITDA ratio is in line with the industry average.
Based on the Price/Free Cash Flow ratio, DGX is valued a bit cheaper than the industry average as 69.61% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.84 | ||
| EV/EBITDA | 12.95 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates an expensive valuation of the company.
DGX has a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)2.26
PEG (5Y)2.95
EPS Next 2Y8.6%
EPS Next 3Y8.35%
5. Dividend
5.1 Amount
DGX has a Yearly Dividend Yield of 1.81%. Purely for dividend investing, there may be better candidates out there.
DGX's Dividend Yield is rather good when compared to the industry average which is at 2.46. DGX pays more dividend than 90.20% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.36, DGX is paying slightly less dividend.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.81% |
5.2 History
On average, the dividend of DGX grows each year by 6.92%, which is quite nice.
DGX has paid a dividend for at least 10 years, which is a reliable track record.
DGX has not decreased their dividend for at least 10 years, which is a reliable track record.
Dividend Growth(5Y)6.92%
Div Incr Years13
Div Non Decr Years20
5.3 Sustainability
37.67% of the earnings are spent on dividend by DGX. This is a low number and sustainable payout ratio.
DGX's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP37.67%
EPS Next 2Y8.6%
EPS Next 3Y8.35%
178.24
+0.12 (+0.07%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners93.15%
Inst Owner Change3.49%
Ins Owners0.31%
Ins Owner Change1.27%
Market Cap19.90B
Analysts76.67
Price Target188.3 (5.64%)
Short Float %3.61%
Short Ratio2.9
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.81% |
Yearly Dividend2.98
Dividend Growth(5Y)6.92%
DP37.67%
Div Incr Years13
Div Non Decr Years20
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.63%
Min EPS beat(2)1.7%
Max EPS beat(2)5.56%
EPS beat(4)3
Avg EPS beat(4)1.9%
Min EPS beat(4)-0.44%
Max EPS beat(4)5.56%
EPS beat(8)7
Avg EPS beat(8)2.26%
EPS beat(12)11
Avg EPS beat(12)2.63%
EPS beat(16)15
Avg EPS beat(16)5.52%
Revenue beat(2)1
Avg Revenue beat(2)0.25%
Min Revenue beat(2)-0.15%
Max Revenue beat(2)0.65%
Revenue beat(4)2
Avg Revenue beat(4)0.37%
Min Revenue beat(4)-0.7%
Max Revenue beat(4)1.68%
Revenue beat(8)6
Avg Revenue beat(8)0.89%
Revenue beat(12)10
Avg Revenue beat(12)1.92%
Revenue beat(16)13
Avg Revenue beat(16)2.59%
PT rev (1m)3.38%
PT rev (3m)7.27%
EPS NQ rev (1m)0.66%
EPS NQ rev (3m)0.94%
EPS NY rev (1m)0.15%
EPS NY rev (3m)-0.15%
Revenue NQ rev (1m)1.43%
Revenue NQ rev (3m)1.66%
Revenue NY rev (1m)0.08%
Revenue NY rev (3m)0.18%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.39 | ||
| Fwd PE | 16.76 | ||
| P/S | 1.96 | ||
| P/FCF | 18.84 | ||
| P/OCF | 13.32 | ||
| P/B | 2.87 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.95 |
EPS(TTM)9.19
EY5.16%
EPS(NY)10.64
Fwd EY5.97%
FCF(TTM)9.46
FCFY5.31%
OCF(TTM)13.38
OCFY7.51%
SpS90.99
BVpS62.07
TBVpS-32.65
PEG (NY)2.26
PEG (5Y)2.95
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.65% | ||
| ROE | 12.87% | ||
| ROCE | 10.16% | ||
| ROIC | 7.86% | ||
| ROICexc | 7.97% | ||
| ROICexgc | 31.4% | ||
| OM | 14.35% | ||
| PM (TTM) | 8.78% | ||
| GM | 33.15% | ||
| FCFM | 10.4% |
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 Turnover0.64
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.85 | ||
| Debt/FCF | 5.55 | ||
| Debt/EBITDA | 2.97 | ||
| Cap/Depr | 84.72% | ||
| Cap/Sales | 4.31% | ||
| Interest Coverage | 5.83 | ||
| Cash Conversion | 75.65% | ||
| Profit Quality | 118.39% | ||
| Current Ratio | 1.44 | ||
| Quick Ratio | 1.31 | ||
| Altman-Z | 3.18 |
F-Score6
WACC7.89%
ROIC/WACC1
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)5.51%
EPS 3Y-14.1%
EPS 5Y6.58%
EPS Q2Q%8.33%
EPS Next Y8.59%
EPS Next 2Y8.6%
EPS Next 3Y8.35%
EPS Next 5Y8.82%
Revenue 1Y (TTM)9.38%
Revenue growth 3Y-2.91%
Revenue growth 5Y5.02%
Sales Q2Q%12.09%
Revenue Next Year9.75%
Revenue Next 2Y6.85%
Revenue Next 3Y5.78%
Revenue Next 5Y4.66%
EBIT growth 1Y11.38%
EBIT growth 3Y-17.38%
EBIT growth 5Y1.28%
EBIT Next Year42.34%
EBIT Next 3Y17.18%
EBIT Next 5YN/A
FCF growth 1Y22.22%
FCF growth 3Y-20.8%
FCF growth 5Y1.52%
OCF growth 1Y12.16%
OCF growth 3Y-15.78%
OCF growth 5Y1.42%