QUEST DIAGNOSTICS INC (DGX) Stock Fundamental Analysis
NYSE:DGX - New York Stock Exchange, Inc. - US74834L1008 - Common Stock - Currency: USD
We assign a fundamental rating of 6 out of 10 to DGX. DGX was compared to 103 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. With these ratings, DGX could be worth investigating further 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.
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
The Return On Assets of DGX (5.65%) is better than 81.55% of its industry peers.
DGX has a Return On Equity of 12.87%. This is amongst the best in the industry. DGX outperforms 81.55% of its industry peers.
Looking at the Return On Invested Capital, with a value of 7.86%, DGX is in the better half of the industry, outperforming 74.76% of the companies in the same industry.
The Average Return On Invested Capital over the past 3 years for DGX is in line with the industry average of 9.71%.
| 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 91.26% of its industry peers.
DGX's Profit Margin has declined in the last couple of years.
DGX has a Operating Margin of 14.35%. This is amongst the best in the industry. DGX outperforms 85.44% of its industry peers.
DGX's Operating Margin has declined in the last couple of years.
DGX's Gross Margin of 33.15% is fine compared to the rest of the industry. DGX outperforms 61.16% 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.
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.
Compared to 1 year ago, DGX has a worse debt to assets ratio.
2.2 Solvency
DGX has an Altman-Z score of 3.14. This indicates that DGX is financially healthy and has little risk of bankruptcy at the moment.
With a decent Altman-Z score value of 3.14, DGX is doing good in the industry, outperforming 66.02% of the companies in the same industry.
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.
With a decent Debt to FCF ratio value of 5.55, DGX is doing good in the industry, outperforming 63.11% of the companies in the same industry.
DGX has a Debt/Equity ratio of 0.85. This is a neutral value indicating DGX is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.85, DGX perfoms like the industry average, outperforming 42.72% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.85 | ||
| Debt/FCF | 5.55 | ||
| Altman-Z | 3.14 |
ROIC/WACC0.99
WACC7.93%
2.3 Liquidity
A Current Ratio of 1.44 indicates that DGX should not have too much problems paying its short term obligations.
DGX's Current ratio of 1.44 is in line compared to the rest of the industry. DGX outperforms 48.54% of its industry peers.
A Quick Ratio of 1.31 indicates that DGX should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.31, DGX perfoms like the industry average, outperforming 47.57% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.44 | ||
| Quick Ratio | 1.31 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 5.51% over the past year.
DGX shows a small growth in Earnings Per Share. Measured over the last years, the EPS has been growing by 6.58% yearly.
DGX shows quite a strong growth in Revenue. In the last year, the Revenue has grown by 9.38%.
DGX shows a small growth in Revenue. Measured over the last years, the Revenue has been growing by 5.02% yearly.
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
Based on estimates for the next years, DGX will show a quite strong growth in Earnings Per Share. The EPS will grow by 8.57% on average per year.
Based on estimates for the next years, DGX will show a small growth in Revenue. The Revenue will grow by 4.61% on average per year.
EPS Next Y8.59%
EPS Next 2Y8.59%
EPS Next 3Y8.35%
EPS Next 5Y8.57%
Revenue Next Year9.75%
Revenue Next 2Y6.85%
Revenue Next 3Y5.78%
Revenue Next 5Y4.61%
3.3 Evolution
When comparing the EPS growth rate of the last years to the growth rate of the upcoming years, we see that the growth is accelerating.
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
The Price/Earnings ratio is 18.77, which indicates a rather expensive current valuation of DGX.
DGX's Price/Earnings ratio is a bit cheaper when compared to the industry. DGX is cheaper than 71.84% 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 27.30.
The Price/Forward Earnings ratio is 16.22, which indicates a correct valuation of DGX.
DGX's Price/Forward Earnings ratio is a bit cheaper when compared to the industry. DGX is cheaper than 72.82% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 21.76. DGX is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.77 | ||
| Fwd PE | 16.22 |
4.2 Price Multiples
DGX's Enterprise Value to EBITDA is on the same level as the industry average.
Based on the Price/Free Cash Flow ratio, DGX is valued a bit cheaper than the industry average as 66.99% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 18.24 | ||
| EV/EBITDA | 12.62 |
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)2.19
PEG (5Y)2.85
EPS Next 2Y8.59%
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 2.43. DGX pays more dividend than 89.32% of the companies in the same industry.
Compared to the average S&P500 Dividend Yield of 2.37, 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
DGX pays out 37.67% of its income as dividend. This is a sustainable payout ratio.
The dividend of DGX is growing, but earnings are growing more, so the dividend growth is sustainable.
DP37.67%
EPS Next 2Y8.59%
EPS Next 3Y8.35%
172.5
-1.47 (-0.84%)
Chartmill FA Rating
GICS SectorHealth Care
GICS IndustryGroupHealth Care Equipment & Services
GICS IndustryHealth Care Providers & Services
Earnings (Last)
Earnings (Next)
Inst Owners95.88%
Inst Owner Change0%
Ins Owners0.31%
Ins Owner Change2.1%
Market Cap19.26B
Analysts76.67
Price Target188.3 (9.16%)
Short Float %3.27%
Short Ratio3.3
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)0%
PT rev (3m)3.38%
EPS NQ rev (1m)-0.04%
EPS NQ rev (3m)0.62%
EPS NY rev (1m)0%
EPS NY rev (3m)0.09%
Revenue NQ rev (1m)-0.07%
Revenue NQ rev (3m)1.32%
Revenue NY rev (1m)0%
Revenue NY rev (3m)0.09%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.77 | ||
| Fwd PE | 16.22 | ||
| P/S | 1.9 | ||
| P/FCF | 18.24 | ||
| P/OCF | 12.89 | ||
| P/B | 2.78 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.62 |
EPS(TTM)9.19
EY5.33%
EPS(NY)10.64
Fwd EY6.17%
FCF(TTM)9.46
FCFY5.48%
OCF(TTM)13.38
OCFY7.76%
SpS90.99
BVpS62.07
TBVpS-32.65
PEG (NY)2.19
PEG (5Y)2.85
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 | 3.14 |
F-Score6
WACC7.93%
ROIC/WACC0.99
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 2Y8.59%
EPS Next 3Y8.35%
EPS Next 5Y8.57%
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 5Y4.61%
EBIT growth 1Y11.38%
EBIT growth 3Y-17.38%
EBIT growth 5Y1.28%
EBIT Next Year43.06%
EBIT Next 3Y16.89%
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%