QUEST DIAGNOSTICS INC (DGX)
US74834L1008 - Common Stock
Taking everything into account, DGX scores 5 out of 10 in our fundamental rating. DGX was compared to 113 industry peers in the Health Care Providers & Services industry. DGX scores excellent on profitability, but there are some minor concerns on its financial health. DGX has a valuation in line with the averages, but it does not seem to be growing. 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.
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 5.21%, DGX belongs to the best of the industry, outperforming 82.30% of the companies in the same industry.
Looking at the Return On Equity, with a value of 12.31%, DGX belongs to the top of the industry, outperforming 81.42% of the companies in the same industry.
With a decent Return On Invested Capital value of 7.39%, DGX is doing good in the industry, outperforming 75.22% 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 8.10%.
The last Return On Invested Capital (7.39%) for DGX is well below the 3 year average (11.72%), which needs to be investigated, but indicates that DGX had better years and this may not be a problem.
| 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 has a Profit Margin of 8.78%. This is amongst the best in the industry. DGX outperforms 92.04% of its industry peers.
DGX's Profit Margin has been stable in the last couple of years.
DGX has a Operating Margin of 13.85%. This is amongst the best in the industry. DGX outperforms 89.38% of its industry peers.
DGX's Operating Margin has declined in the last couple of years.
DGX's Gross Margin of 32.94% is fine compared to the rest of the industry. DGX outperforms 62.83% 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
The Return on Invested Capital (ROIC) is just above the Cost of Capital (WACC), so DGX is still creating some value.
DGX has about the same amout of shares outstanding than it did 1 year ago.
DGX has less shares outstanding than it did 5 years ago.
DGX has a worse debt/assets ratio than last year.
2.2 Solvency
DGX has an Altman-Z score of 2.87. 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.
With a decent Altman-Z score value of 2.87, DGX is doing good in the industry, outperforming 73.45% of the companies in the same industry.
The Debt to FCF ratio of DGX is 6.11, which is on the high side as it means it would take DGX, 6.11 years of fcf income to pay off all of its debts.
With a decent Debt to FCF ratio value of 6.11, DGX is doing good in the industry, outperforming 76.11% of the companies in the same industry.
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 61.95% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.83 | ||
| Debt/FCF | 6.11 | ||
| Altman-Z | 2.87 |
ROIC/WACC0.95
WACC7.74%
2.3 Liquidity
A Current Ratio of 1.25 indicates that DGX should not have too much problems paying its short term obligations.
With a Current ratio value of 1.25, DGX is not doing good in the industry: 61.95% of the companies in the same industry are doing better.
A Quick Ratio of 1.17 indicates that DGX should not have too much problems paying its short term obligations.
With a Quick ratio value of 1.17, DGX is not doing good in the industry: 61.95% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.25 | ||
| Quick Ratio | 1.17 |
3. Growth
3.1 Past
DGX shows a small growth in Earnings Per Share. In the last year, the EPS has grown by 3.51%.
Measured over the past 5 years, DGX shows a small growth in Earnings Per Share. The EPS has been growing by 6.66% on average per year.
DGX shows a small growth in Revenue. In the last year, the Revenue has grown by 2.60%.
The Revenue has been growing slightly by 4.20% on average over the past years.
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
Based on estimates for the next years, DGX will show a small growth in Earnings Per Share. The EPS will grow by 6.60% on average per year.
DGX is expected to show a small growth in Revenue. In the coming years, the Revenue will grow by 2.49% yearly.
EPS Next Y3.25%
EPS Next 2Y6.37%
EPS Next 3Y7.3%
EPS Next 5Y6.6%
Revenue Next Year6.74%
Revenue Next 2Y7.71%
Revenue Next 3Y6.37%
Revenue Next 5Y2.49%
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 stable.
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
The Price/Earnings ratio is 18.54, which indicates a rather expensive current valuation of DGX.
74.34% of the companies in the same industry are more expensive than DGX, based on the Price/Earnings ratio.
When comparing the Price/Earnings ratio of DGX to the average of the S&P500 Index (28.96), we can say DGX is valued slightly cheaper.
The Price/Forward Earnings ratio is 16.63, which indicates a correct valuation of DGX.
Based on the Price/Forward Earnings ratio, DGX is valued a bit cheaper than 76.99% of the companies in the same industry.
The average S&P500 Price/Forward Earnings ratio is at 23.82. DGX is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 18.54 | ||
| Fwd PE | 16.63 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DGX is valued a bit cheaper than 67.26% of the companies in the same industry.
80.53% 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 | 17.88 | ||
| EV/EBITDA | 13.14 |
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)5.71
PEG (5Y)2.78
EPS Next 2Y6.37%
EPS Next 3Y7.3%
5. Dividend
5.1 Amount
DGX has a Yearly Dividend Yield of 1.91%. Purely for dividend investing, there may be better candidates out there.
Compared to an average industry Dividend Yield of 3.16, DGX pays a better dividend. On top of this DGX pays more dividend than 88.50% of the companies listed in the same industry.
DGX's Dividend Yield is comparable with the S&P500 average which is at 2.23.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.91% |
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 its dividend for at least 10 years, so it has a reliable track record of non decreasing dividend.
Dividend Growth(5Y)7.5%
Div Incr Years12
Div Non Decr Years19
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 slower than its dividend. This means the dividend growth is not sustainable.
DP39.02%
EPS Next 2Y6.37%
EPS Next 3Y7.3%
QUEST DIAGNOSTICS INC
NYSE:DGX (11/21/2024, 5:07:43 PM)
After market: 163.89 0 (0%)163.89
+2.57 (+1.59%)
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 Cap18.29B
Analysts
Price Target
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.91% |
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)
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EPS beat(4)
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EPS beat(8)
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EPS beat(12)
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EPS beat(16)
Avg EPS beat(16)
Revenue beat(2)
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Min Revenue beat(2)
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Revenue beat(4)
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Revenue beat(8)
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Revenue beat(12)
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Revenue beat(16)
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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 | 18.54 | ||
| Fwd PE | 16.63 | ||
| 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)5.71
PEG (5Y)2.78
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.21% | ||
| ROE | 12.31% | ||
| ROCE | |||
| ROIC | |||
| ROICexc | |||
| ROICexgc | |||
| OM | 13.85% | ||
| PM (TTM) | 8.78% | ||
| GM | 32.94% | ||
| 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 Turnover0.59
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.83 | ||
| Debt/FCF | |||
| Debt/EBITDA | |||
| Cap/Depr | |||
| Cap/Sales | |||
| Interest Coverage | |||
| Cash Conversion | |||
| Profit Quality | |||
| Current Ratio | 1.25 | ||
| Quick Ratio | 1.17 | ||
| 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)
High Growth Momentum
Growth
EPS 1Y (TTM)3.51%
EPS 3Y-7.9%
EPS 5Y
EPS Q2Q%
EPS Next Y3.25%
EPS Next 2Y
EPS Next 3Y
EPS Next 5Y
Revenue 1Y (TTM)2.6%
Revenue growth 3Y-0.66%
Revenue growth 5Y
Sales 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