QUEST DIAGNOSTICS INC (DGX)
US74834L1008 - Common Stock
We assign a fundamental rating of 5 out of 10 to DGX. DGX was compared to 117 industry peers in the Health Care Providers & Services industry. While DGX belongs to the best of the industry regarding profitability, there are some minor concerns on its financial health. DGX is valued correctly, but it does not seem to be growing. Finally DGX also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
In the past year DGX was profitable.
DGX had a positive operating cash flow in the past year.
In the past 5 years DGX has always been profitable.
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 6.04%, DGX belongs to the top of the industry, outperforming 84.48% of the companies in the same industry.
DGX has a Return On Equity of 13.11%. This is amongst the best in the industry. DGX outperforms 83.62% of its industry peers.
Looking at the Return On Invested Capital, with a value of 8.60%, DGX belongs to the top of the industry, outperforming 84.48% of the companies in the same industry.
DGX had an Average Return On Invested Capital over the past 3 years of 11.72%. This is above the industry average of 8.59%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.04% | ||
| ROE | 13.11% | ||
| ROIC | 8.6% |
ROA(3y)9.34%
ROA(5y)8.96%
ROE(3y)20.1%
ROE(5y)19.31%
ROIC(3y)11.72%
ROIC(5y)11.44%
1.3 Margins
DGX has a better Profit Margin (9.08%) than 92.24% of its industry peers.
In the last couple of years the Profit Margin of DGX has remained more or less at the same level.
The Operating Margin of DGX (13.78%) is better than 93.97% of its industry peers.
In the last couple of years the Operating Margin of DGX has declined.
Looking at the Gross Margin, with a value of 32.91%, DGX is in the better half of the industry, outperforming 60.34% 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 | 13.78% | ||
| PM (TTM) | 9.08% | ||
| GM | 32.91% |
OM growth 3Y-12.31%
OM growth 5Y-2.68%
PM growth 3Y-15.26%
PM growth 5Y-1.15%
GM growth 3Y-4.61%
GM growth 5Y-1.27%
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.
Compared to 1 year ago, DGX has about the same amount of shares outstanding.
DGX has less shares outstanding than it did 5 years ago.
The debt/assets ratio for DGX is higher compared to a year ago.
2.2 Solvency
DGX has an Altman-Z score of 3.05. This indicates that DGX is financially healthy and has little risk of bankruptcy at the moment.
The Altman-Z score of DGX (3.05) is better than 75.86% of its industry peers.
The Debt to FCF ratio of DGX is 4.97, which is a neutral value as it means it would take DGX, 4.97 years of fcf income to pay off all of its debts.
Looking at the Debt to FCF ratio, with a value of 4.97, DGX is in the better half of the industry, outperforming 74.14% of the companies in the same industry.
A Debt/Equity ratio of 0.59 indicates that DGX is somewhat dependend on debt financing.
The Debt to Equity ratio of DGX (0.59) is comparable to the rest of the industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | 4.97 | ||
| Altman-Z | 3.05 |
ROIC/WACC1.12
WACC7.71%
2.3 Liquidity
A Current Ratio of 0.97 indicates that DGX may have some problems paying its short term obligations.
DGX has a worse Current ratio (0.97) than 72.41% of its industry peers.
A Quick Ratio of 0.89 indicates that DGX may have some problems paying its short term obligations.
DGX has a Quick ratio of 0.89. This is in the lower half of the industry: DGX underperforms 66.38% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 0.97 | ||
| Quick Ratio | 0.89 |
3. Growth
3.1 Past
DGX shows a slight negative growth in Earnings Per Share. In the last year, the EPS has decreased by -0.34%.
DGX shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.66% yearly.
DGX shows a decrease in Revenue. In the last year, the revenue decreased by -3.29%.
Measured over the past years, DGX shows a small growth in Revenue. The Revenue has been growing by 4.20% on average per year.
EPS 1Y (TTM)-0.34%
EPS 3Y-7.9%
EPS 5Y6.66%
EPS growth Q2Q0%
Revenue 1Y (TTM)-3.29%
Revenue growth 3Y-0.66%
Revenue growth 5Y4.2%
Revenue growth Q2Q1.5%
3.2 Future
Based on estimates for the next years, DGX will show a small growth in Earnings Per Share. The EPS will grow by 7.36% on average per year.
Based on estimates for the next years, DGX will show a small growth in Revenue. The Revenue will grow by 1.50% on average per year.
EPS Next Y1.46%
EPS Next 2Y4.43%
EPS Next 3Y5.62%
EPS Next 5Y7.36%
Revenue Next Year2.06%
Revenue Next 2Y2.79%
Revenue Next 3Y3.06%
Revenue Next 5Y1.5%
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 decreasing.
4. Valuation
4.1 Price/Earnings Ratio
Based on the Price/Earnings ratio of 16.30, the valuation of DGX can be described as correct.
Based on the Price/Earnings ratio, DGX is valued cheaply inside the industry as 84.48% of the companies are valued more expensively.
DGX is valuated rather cheaply when we compare the Price/Earnings ratio to 24.84, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 14.95, DGX is valued correctly.
Based on the Price/Forward Earnings ratio, DGX is valued cheaper than 81.03% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.35. DGX is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.3 | ||
| Fwd PE | 14.95 |
4.2 Price Multiples
DGX's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. DGX is cheaper than 74.14% of the companies in the same industry.
80.17% of the companies in the same industry are more expensive than DGX, based on the Price/Free Cash Flow ratio.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.65 | ||
| EV/EBITDA | 11.08 |
4.3 Compensation for Growth
The high PEG Ratio(NY), which compensates the Price/Earnings for growth, indicates DGX does not grow enough to justify the current Price/Earnings ratio.
The excellent profitability rating of DGX may justify a higher PE ratio.
PEG (NY)11.19
PEG (5Y)2.45
EPS Next 2Y4.43%
EPS Next 3Y5.62%
5. Dividend
5.1 Amount
DGX has a Yearly Dividend Yield of 2.23%. 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 2.73. DGX pays more dividend than 92.24% of the companies in the same industry.
DGX's Dividend Yield is comparable with the S&P500 average which is at 2.41.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.23% |
5.2 History
The dividend of DGX is nicely growing with an annual growth rate of 7.50%!
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)7.5%
Div Incr Years12
Div Non Decr Years17
5.3 Sustainability
DGX pays out 37.84% of its income as dividend. This is a sustainable payout ratio.
DGX's earnings are growing slower than its dividend. This means the dividend growth is not sustainable.
DP37.84%
EPS Next 2Y4.43%
EPS Next 3Y5.62%
QUEST DIAGNOSTICS INC
NYSE:DGX (4/29/2024, 11:16:35 AM)
141.97
+7.71 (+5.74%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners
Inst Owner Change
Ins Owners
Ins Owner Change
Market Cap15.77B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 2.23% |
Dividend Growth(5Y)
DP
Div Incr Years
Div Non Decr Years
Ex-Date
Surprises & Revisions
EPS beat(2)
Avg EPS beat(2)
Min EPS beat(2)
Max EPS beat(2)
EPS beat(4)
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Min EPS beat(4)
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EPS beat(8)
Avg EPS beat(8)
EPS beat(12)
Avg EPS beat(12)
EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
Avg Revenue beat(2)
Min Revenue beat(2)
Max Revenue beat(2)
Revenue beat(4)
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Min Revenue beat(4)
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Revenue beat(8)
Avg Revenue beat(8)
Revenue beat(12)
Avg Revenue beat(12)
Revenue beat(16)
Avg Revenue beat(16)
PT rev (1m)
PT rev (3m)
EPS NQ rev (1m)
EPS NQ rev (3m)
EPS NY rev (1m)
EPS NY rev (3m)
Revenue NQ rev (1m)
Revenue NQ rev (3m)
Revenue NY rev (1m)
Revenue NY rev (3m)
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 16.3 | ||
| Fwd PE | 14.95 | ||
| P/S | |||
| P/FCF | |||
| P/OCF | |||
| P/B | |||
| P/tB | |||
| EV/EBITDA |
EPS(TTM)
EY
EPS(NY)
Fwd EY
FCF(TTM)
FCFY
OCF(TTM)
OCFY
SpS
BVpS
TBVpS
PEG (NY)11.19
PEG (5Y)2.45
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 6.04% | ||
| ROE | 13.11% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 13.78% | ||
| PM (TTM) | 9.08% | ||
| GM | 32.91% | ||
| FCFM |
ROA(3y)
ROA(5y)
ROE(3y)
ROE(5y)
ROIC(3y)
ROIC(5y)
ROICexc(3y)
ROICexc(5y)
ROICexgc(3y)
ROICexgc(5y)
ROCE(3y)
ROCE(5y)
ROICexcg growth 3Y
ROICexcg growth 5Y
ROICexc growth 3Y
ROICexc growth 5Y
OM growth 3Y
OM growth 5Y
PM growth 3Y
PM growth 5Y
GM growth 3Y
GM growth 5Y
F-Score
Asset Turnover0.67
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.59 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 0.97 | ||
| Quick Ratio | 0.89 | ||
| Altman-Z |
F-Score
WACC
ROIC/WACC
Cap/Depr(3y)
Cap/Depr(5y)
Cap/Sales(3y)
Cap/Sales(5y)
Profit Quality(3y)
Profit Quality(5y)
Growth
EPS 1Y (TTM)-0.34%
EPS 3Y-7.9%
EPS 5Y
EPS growth Q2Q
EPS Next Y1.46%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)-3.29%
Revenue growth 3Y-0.66%
Revenue growth 5Y
Revenue growth Q2Q
Revenue Next Year
Revenue Next 2Y
Revenue Next 3Y
Revenue Next 5Y
EBIT growth 1Y
EBIT growth 3Y
EBIT growth 5Y
EBIT Next Year
EBIT Next 3Y
EBIT Next 5Y
FCF growth 1Y
FCF growth 3Y
FCF growth 5Y
OCF growth 1Y
OCF growth 3Y
OCF growth 5Y