QUEST DIAGNOSTICS INC (DGX) Stock Fundamental Analysis
NYSE:DGX - New York Stock Exchange, Inc. - US74834L1008 - Common Stock
Taking everything into account, DGX scores 5 out of 10 in our fundamental rating. DGX was compared to 108 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 correct valuation and a medium growth rate. 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.
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
Looking at the Return On Assets, with a value of 5.21%, DGX belongs to the top of the industry, outperforming 82.24% of the companies in the same industry.
DGX has a better Return On Equity (12.31%) than 79.44% of its industry peers.
Looking at the Return On Invested Capital, with a value of 7.39%, DGX is in the better half of the industry, outperforming 72.90% 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 8.27%.
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
Looking at the Profit Margin, with a value of 8.78%, DGX belongs to the top of the industry, outperforming 91.59% of the companies in the same industry.
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 (13.85%) is better than 87.85% of its industry peers.
DGX's Operating Margin has declined in the last couple of years.
With a Gross Margin value of 32.94%, DGX perfoms like the industry average, outperforming 59.81% of the companies in the same industry.
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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), DGX is creating some value.
DGX has about the same amout of shares outstanding than it did 1 year ago.
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 better Altman-Z score (2.81) than 65.42% 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.
The Debt to FCF ratio of DGX (6.11) is better than 72.90% 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.
DGX's Debt to Equity ratio of 0.83 is on the low side compared to the rest of the industry. DGX is outperformed by 62.62% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.83 | ||
| Debt/FCF | 6.11 | ||
| Altman-Z | 2.81 |
ROIC/WACC0.95
WACC7.82%
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: 62.62% of the companies in the same industry are doing better.
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 has a worse Quick ratio (1.17) than 61.68% of its industry peers.
| 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%.
The Earnings Per Share has been growing slightly by 6.66% on average over the past years.
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
The Earnings Per Share is expected to grow by 8.04% on average over the next years. This is quite good.
Based on estimates for the next years, DGX will show a small growth in Revenue. The Revenue will grow by 4.16% on average per year.
EPS Next Y3.22%
EPS Next 2Y6.35%
EPS Next 3Y7.16%
EPS Next 5Y8.04%
Revenue Next Year6.74%
Revenue Next 2Y7.68%
Revenue Next 3Y6.34%
Revenue Next 5Y4.16%
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
With a Price/Earnings ratio of 17.27, DGX is valued on the expensive side.
Compared to the rest of the industry, the Price/Earnings ratio of DGX indicates a somewhat cheap valuation: DGX is cheaper than 76.64% of the companies listed in the same industry.
Compared to an average S&P500 Price/Earnings ratio of 28.29, DGX is valued a bit cheaper.
With a Price/Forward Earnings ratio of 15.50, DGX is valued correctly.
75.70% of the companies in the same industry are more expensive than DGX, based on the Price/Forward Earnings ratio.
The average S&P500 Price/Forward Earnings ratio is at 24.44. DGX is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.27 | ||
| Fwd PE | 15.5 |
4.2 Price Multiples
63.55% of the companies in the same industry are more expensive than DGX, based on the Enterprise Value to EBITDA ratio.
Based on the Price/Free Cash Flow ratio, DGX is valued cheaply inside the industry as 80.37% of the companies are valued more expensively.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 16.66 | ||
| EV/EBITDA | 12.6 |
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 a very decent profitability rating, which may justify a higher PE ratio.
PEG (NY)5.36
PEG (5Y)2.59
EPS Next 2Y6.35%
EPS Next 3Y7.16%
5. Dividend
5.1 Amount
DGX has a Yearly Dividend Yield of 1.98%.
DGX's Dividend Yield is rather good when compared to the industry average which is at 2.87. DGX pays more dividend than 88.78% of the companies in the same industry.
DGX's Dividend Yield is comparable with the S&P500 average which is at 2.28.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.98% |
5.2 History
The dividend of DGX is nicely growing with an annual growth rate of 7.50%!
DGX has been paying a dividend for at least 10 years, so it has 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
DGX pays out 39.02% of its income as dividend. This is a 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 (1/21/2025, 8:04:00 PM)
After market: 152.65 0 (0%)152.65
+1.45 (+0.96%)
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 Change0.08%
Ins Owners0.3%
Ins Owner Change-0.32%
Market Cap17.04B
Analysts78.26
Price Target175.13 (14.73%)
Short Float %1.83%
Short Ratio2.51
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.98% |
Yearly Dividend2.83
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)1.56%
PT rev (3m)10.03%
EPS NQ rev (1m)0%
EPS NQ rev (3m)2.1%
EPS NY rev (1m)0%
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)2.27%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 17.27 | ||
| Fwd PE | 15.5 | ||
| P/S | 1.79 | ||
| P/FCF | 16.66 | ||
| P/OCF | 12.2 | ||
| P/B | 2.5 | ||
| P/tB | N/A | ||
| EV/EBITDA | 12.6 |
EPS(TTM)8.84
EY5.79%
EPS(NY)9.85
Fwd EY6.45%
FCF(TTM)9.17
FCFY6%
OCF(TTM)12.52
OCFY8.2%
SpS85.46
BVpS61
TBVpS-31.46
PEG (NY)5.36
PEG (5Y)2.59
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
WACC7.82%
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 2Y7.68%
Revenue Next 3Y6.34%
Revenue Next 5Y4.16%
EBIT growth 1Y8.9%
EBIT growth 3Y-12.89%
EBIT growth 5Y1.41%
EBIT Next Year32.67%
EBIT Next 3Y15.91%
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%