QUEST DIAGNOSTICS INC (DGX)
US74834L1008 - Common Stock
DGX gets a fundamental rating of 6 out of 10. The analysis compared the fundamentals against 109 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 has a decent growth rate and is not valued too expensively. DGX also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
DGX had positive earnings in the past year.
In the past year DGX had a positive cash flow from operations.
Each year in the past 5 years DGX has been profitable.
In the past 5 years DGX always reported a positive cash flow from operatings.
1.2 Ratios
DGX has a better Return On Assets (5.21%) than 82.41% of its industry peers.
DGX has a Return On Equity of 12.31%. This is in the better half of the industry: DGX outperforms 79.63% of its industry peers.
DGX has a Return On Invested Capital of 7.39%. This is in the better half of the industry: DGX outperforms 73.15% of its industry peers.
The Average Return On Invested Capital over the past 3 years for DGX is above the industry average of 8.15%.
The 3 year average ROIC (11.72%) for DGX is well above the current ROIC(7.39%). The reason for the recent decline needs to be investigated.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.21% | ||
| ROE | 12.31% | ||
| ROIC | 7.39% |
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's Profit Margin of 8.78% is amongst the best of the industry. DGX outperforms 91.67% of its industry peers.
In the last couple of years the Profit Margin of DGX has remained more or less at the same level.
DGX has a better Operating Margin (13.85%) than 87.96% of its industry peers.
DGX's Operating Margin has declined in the last couple of years.
DGX has a Gross Margin of 32.94%. This is in the better half of the industry: DGX outperforms 60.19% of its industry peers.
In the last couple of years the Gross Margin of DGX has remained more or less at the same level.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 13.85% | ||
| PM (TTM) | 8.78% | ||
| GM | 32.94% |
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
DGX has a Return on Invested Capital (ROIC), which is just above the Cost of Capital (WACC), which means it is creating some value.
Compared to 1 year ago, DGX has about the same amount of shares outstanding.
The number of shares outstanding for DGX has been reduced compared to 5 years ago.
DGX has a worse debt/assets ratio than last year.
2.2 Solvency
DGX has an Altman-Z score of 2.81. This is not the best score and indicates that DGX is in the grey zone with still only limited risk for bankruptcy at the moment.
DGX has a Altman-Z score of 2.81. This is in the better half of the industry: DGX outperforms 69.44% of its industry peers.
DGX has a debt to FCF ratio of 6.11. This is a slightly negative value and a sign of low solvency as DGX would need 6.11 years to pay back of all of its debts.
DGX has a better Debt to FCF ratio (6.11) than 72.22% of its industry peers.
DGX has a Debt/Equity ratio of 0.83. This is a neutral value indicating DGX is somewhat dependend on debt financing.
Looking at the Debt to Equity ratio, with a value of 0.83, DGX is doing worse than 62.04% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.83 | ||
| Debt/FCF | 6.11 | ||
| Altman-Z | 2.81 |
ROIC/WACC0.95
WACC7.79%
2.3 Liquidity
DGX has a Current Ratio of 1.25. 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 Current ratio of 1.25. This is in the lower half of the industry: DGX underperforms 62.04% of its industry peers.
DGX has a Quick Ratio of 1.17. This is a normal value and indicates that DGX is financially healthy and should not expect problems in meeting its short term obligations.
DGX's Quick ratio of 1.17 is on the low side compared to the rest of the industry. DGX is outperformed by 61.11% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.25 | ||
| Quick Ratio | 1.17 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 3.51% over the past year.
DGX shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.66% yearly.
Looking at the last year, DGX shows a small growth in Revenue. The Revenue has grown by 2.60% in the last year.
DGX shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 4.20% yearly.
EPS 1Y (TTM)3.51%
EPS 3Y-7.9%
EPS 5Y6.66%
EPS Q2Q%3.6%
Revenue 1Y (TTM)2.6%
Revenue growth 3Y-0.66%
Revenue growth 5Y4.2%
Sales Q2Q%8.41%
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 8.04% yearly.
The Revenue is expected to grow by 4.16% on average over the next years.
EPS Next Y3.22%
EPS Next 2Y6.35%
EPS Next 3Y7.16%
EPS Next 5Y8.04%
Revenue Next Year6.74%
Revenue Next 2Y7.67%
Revenue Next 3Y6.33%
Revenue Next 5Y4.16%
3.3 Evolution
The EPS growth rate is accelerating: in the next years the growth will be better 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
A Price/Earnings ratio of 17.32 indicates a rather expensive valuation of DGX.
73.15% of the companies in the same industry are more expensive than DGX, based on the Price/Earnings ratio.
DGX is valuated rather cheaply when we compare the Price/Earnings ratio to 27.73, which is the current average of the S&P500 Index.
With a Price/Forward Earnings ratio of 15.54, DGX is valued correctly.
73.15% of the companies in the same industry are more expensive than DGX, based on the Price/Forward Earnings ratio.
DGX's Price/Forward Earnings ratio indicates a valuation a bit cheaper than the S&P500 average which is at 22.83.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.32 | ||
| Fwd PE | 15.54 |
4.2 Price Multiples
DGX's Enterprise Value to EBITDA ratio is a bit cheaper when compared to the industry. DGX is cheaper than 61.11% of the companies in the same industry.
78.70% 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 | 16.7 | ||
| EV/EBITDA | 12.63 |
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.
DGX has an outstanding profitability rating, which may justify a higher PE ratio.
PEG (NY)5.37
PEG (5Y)2.6
EPS Next 2Y6.35%
EPS Next 3Y7.16%
5. Dividend
5.1 Amount
DGX has a Yearly Dividend Yield of 1.98%.
Compared to an average industry Dividend Yield of 3.17, DGX pays a better dividend. On top of this DGX pays more dividend than 87.96% of the companies listed in the same industry.
Compared to an average S&P500 Dividend Yield of 2.34, DGX has a dividend comparable with the average S&P500 company.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.98% |
5.2 History
On average, the dividend of DGX grows each year by 7.50%, 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)7.5%
Div Incr Years13
Div Non Decr Years20
5.3 Sustainability
39.02% of the earnings are spent on dividend by DGX. This is a low number and sustainable payout ratio.
DGX's earnings are growing around the same pace than its dividend. As long as the earnings growth is kept the dividend growth is sustainable.
DP39.02%
EPS Next 2Y6.35%
EPS Next 3Y7.16%
QUEST DIAGNOSTICS INC
NYSE:DGX (12/20/2024, 8:05:19 PM)
After market: 153.1 0 (0%)153.1
+1.58 (+1.04%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners91.88%
Inst Owner Change0.71%
Ins Owners0.3%
Ins Owner Change-0.63%
Market Cap17.09B
Analysts77.39
Price Target172.43 (12.63%)
Short Float %1.83%
Short Ratio2.37
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.98% |
Dividend Growth(5Y)7.5%
DP39.02%
Div Incr Years13
Div Non Decr Years20
Ex-Date
Surprises & Revisions
EPS beat(2)1
Avg EPS beat(2)0.18%
Min EPS beat(2)-0.44%
Max EPS beat(2)0.8%
EPS beat(4)3
Avg EPS beat(4)2.48%
Min EPS beat(4)-0.44%
Max EPS beat(4)8.87%
EPS beat(8)7
Avg EPS beat(8)1.98%
EPS beat(12)11
Avg EPS beat(12)2.92%
EPS beat(16)15
Avg EPS beat(16)5.37%
Revenue beat(2)1
Avg Revenue beat(2)0.49%
Min Revenue beat(2)-0.7%
Max Revenue beat(2)1.68%
Revenue beat(4)3
Avg Revenue beat(4)0.98%
Min Revenue beat(4)-0.7%
Max Revenue beat(4)2.42%
Revenue beat(8)7
Avg Revenue beat(8)1.75%
Revenue beat(12)10
Avg Revenue beat(12)1.89%
Revenue beat(16)14
Avg Revenue beat(16)2.77%
PT rev (1m)5.71%
PT rev (3m)10.76%
EPS NQ rev (1m)-0.13%
EPS NQ rev (3m)2.1%
EPS NY rev (1m)-0.02%
EPS NY rev (3m)0.17%
Revenue NQ rev (1m)0%
Revenue NQ rev (3m)10.34%
Revenue NY rev (1m)0%
Revenue NY rev (3m)2.22%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.32 | ||
| Fwd PE | 15.54 | ||
| P/S | 1.79 | ||
| P/FCF | 16.7 | ||
| P/OCF | 12.23 | ||
| P/B | 2.51 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.63 |
EPS(TTM)8.84
EY5.77%
EPS(NY)9.85
Fwd EY6.43%
FCF(TTM)9.17
FCFY5.99%
OCF(TTM)12.52
OCFY8.17%
SpS85.46
BVpS61
TBVpS-31.46
PEG (NY)5.37
PEG (5Y)2.6
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.21% | ||
| ROE | 12.31% | ||
| ROCE | 9.43% | ||
| ROIC | 7.39% | ||
| ROICexc | 7.82% | ||
| ROICexgc | 35.46% | ||
| OM | 13.85% | ||
| PM (TTM) | 8.78% | ||
| GM | 32.94% | ||
| FCFM | 10.72% |
ROA(3y)9.34%
ROA(5y)8.96%
ROE(3y)20.1%
ROE(5y)19.31%
ROIC(3y)11.72%
ROIC(5y)11.44%
ROICexc(3y)12.41%
ROICexc(5y)12.34%
ROICexgc(3y)49.88%
ROICexgc(5y)49.96%
ROCE(3y)15.1%
ROCE(5y)14.75%
ROICexcg growth 3Y-8.34%
ROICexcg growth 5Y-7.78%
ROICexc growth 3Y-13.91%
ROICexc growth 5Y-2.68%
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%
F-Score5
Asset Turnover0.59
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.83 | ||
| Debt/FCF | 6.11 | ||
| Debt/EBITDA | 3.16 | ||
| Cap/Depr | 80.09% | ||
| Cap/Sales | 3.92% | ||
| Interest Coverage | 6.48 | ||
| Cash Conversion | 78.13% | ||
| Profit Quality | 122.08% | ||
| Current Ratio | 1.25 | ||
| Quick Ratio | 1.17 | ||
| Altman-Z | 2.81 |
F-Score5
WACC7.79%
ROIC/WACC0.95
Cap/Depr(3y)94.72%
Cap/Depr(5y)104.31%
Cap/Sales(3y)4.08%
Cap/Sales(5y)4.37%
Profit Quality(3y)111.06%
Profit Quality(5y)108.63%
High Growth Momentum
Growth
EPS 1Y (TTM)3.51%
EPS 3Y-7.9%
EPS 5Y6.66%
EPS Q2Q%3.6%
EPS Next Y3.22%
EPS Next 2Y6.35%
EPS Next 3Y7.16%
EPS Next 5Y8.04%
Revenue 1Y (TTM)2.6%
Revenue growth 3Y-0.66%
Revenue growth 5Y4.2%
Sales Q2Q%8.41%
Revenue Next Year6.74%
Revenue Next 2Y7.67%
Revenue Next 3Y6.33%
Revenue Next 5Y4.16%
EBIT growth 1Y8.9%
EBIT growth 3Y-12.89%
EBIT growth 5Y1.41%
EBIT Next Year32.54%
EBIT Next 3Y16.33%
EBIT Next 5YN/A
FCF growth 1Y-30.12%
FCF growth 3Y-18.35%
FCF growth 5Y1.12%
OCF growth 1Y-25.09%
OCF growth 3Y-14.07%
OCF growth 5Y1.17%