QUEST DIAGNOSTICS INC (DGX) Stock Fundamental Analysis
NYSE:DGX - New York Stock Exchange, Inc. - US74834L1008 - Common Stock - Currency: USD
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. While DGX has a great profitability rating, there are some minor concerns on its financial health. DGX has a correct valuation and a medium growth rate. Finally DGX also has an excellent dividend rating.
1. Profitability
1.1 Basic Checks
DGX had positive earnings in the past year.
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
The Return On Assets of DGX (5.36%) is better than 80.37% of its industry peers.
Looking at the Return On Equity, with a value of 12.78%, DGX belongs to the top of the industry, outperforming 80.37% of the companies in the same industry.
DGX has a Return On Invested Capital of 7.81%. This is in the better half of the industry: DGX outperforms 73.83% of its industry peers.
Measured over the past 3 years, the Average Return On Invested Capital for DGX is in line with the industry average of 8.14%.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.36% | ||
| ROE | 12.78% | ||
| ROIC | 7.81% |
ROA(3y)6.25%
ROA(5y)8.71%
ROE(3y)14.08%
ROE(5y)18.83%
ROIC(3y)8.8%
ROIC(5y)10.99%
1.3 Margins
With an excellent Profit Margin value of 8.77%, DGX belongs to the best 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 declined.
DGX has a better Operating Margin (14.28%) than 87.85% of its industry peers.
DGX's Operating Margin has declined in the last couple of years.
DGX has a Gross Margin (33.15%) which is in line with its industry peers.
DGX's Gross Margin has been stable in the last couple of years.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| OM | 14.28% | ||
| PM (TTM) | 8.77% | ||
| 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
With a Return on Invested Capital (ROIC) just above the Cost of Capital (WACC), DGX is creating some value.
The number of shares outstanding for DGX remains at a similar level compared to 1 year ago.
DGX has less shares outstanding than it did 5 years ago.
Compared to 1 year ago, DGX has a worse debt to assets ratio.
2.2 Solvency
An Altman-Z score of 2.95 indicates that DGX is not a great score, but indicates only limited risk for bankruptcy at the moment.
DGX has a Altman-Z score of 2.95. This is in the better half of the industry: DGX outperforms 67.29% of its industry peers.
DGX has a debt to FCF ratio of 6.84. This is a slightly negative value and a sign of low solvency as DGX would need 6.84 years to pay back of all of its debts.
The Debt to FCF ratio of DGX (6.84) is better than 68.22% of its industry peers.
A Debt/Equity ratio of 0.83 indicates that DGX is somewhat dependend on debt financing.
With a Debt to Equity ratio value of 0.83, DGX is not doing good in the industry: 60.75% of the companies in the same industry are doing better.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.83 | ||
| Debt/FCF | 6.84 | ||
| Altman-Z | 2.95 |
ROIC/WACC0.95
WACC8.25%
2.3 Liquidity
DGX has a Current Ratio of 1.10. This is a normal value and indicates that DGX is financially healthy and should not expect problems in meeting its short term obligations.
With a Current ratio value of 1.10, DGX is not doing good in the industry: 72.90% of the companies in the same industry are doing better.
A Quick Ratio of 1.02 indicates that DGX should not have too much problems paying its short term obligations.
DGX has a Quick ratio of 1.02. This is in the lower half of the industry: DGX underperforms 69.16% of its industry peers.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Current Ratio | 1.1 | ||
| Quick Ratio | 1.02 |
3. Growth
3.1 Past
The Earnings Per Share has been growing slightly by 3.56% 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.
Looking at the last year, DGX shows a small growth in Revenue. The Revenue has grown by 6.70% in the last year.
The Revenue has been growing slightly by 5.02% on average over the past years.
EPS 1Y (TTM)3.56%
EPS 3Y-14.1%
EPS 5Y6.58%
EPS Q2Q%8.37%
Revenue 1Y (TTM)6.7%
Revenue growth 3Y-2.91%
Revenue growth 5Y5.02%
Sales Q2Q%14.55%
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 9.47% yearly.
The Revenue is expected to grow by 3.52% on average over the next years.
EPS Next Y8.75%
EPS Next 2Y8.99%
EPS Next 3Y8.88%
EPS Next 5Y9.47%
Revenue Next Year9.55%
Revenue Next 2Y6.65%
Revenue Next 3Y5.72%
Revenue Next 5Y3.52%
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 decreasing: in the next years the growth will be less than in the last years.
4. Valuation
4.1 Price/Earnings Ratio
The Price/Earnings ratio is 19.10, which indicates a rather expensive current valuation of DGX.
Based on the Price/Earnings ratio, DGX is valued a bit cheaper than the industry average as 71.03% of the companies are valued more expensively.
The average S&P500 Price/Earnings ratio is at 29.63. DGX is valued slightly cheaper when compared to this.
A Price/Forward Earnings ratio of 17.56 indicates a rather expensive valuation of DGX.
70.09% 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 22.68. DGX is valued slightly cheaper when compared to this.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.1 | ||
| Fwd PE | 17.56 |
4.2 Price Multiples
Based on the Enterprise Value to EBITDA ratio, DGX is valued a bit cheaper than the industry average as 61.68% of the companies are valued more expensively.
DGX's Price/Free Cash Flow ratio is a bit cheaper when compared to the industry. DGX is cheaper than 71.96% of the companies in the same industry.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| P/FCF | 21.03 | ||
| EV/EBITDA | 13.02 |
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 decent profitability rating of DGX may justify a higher PE ratio.
PEG (NY)2.18
PEG (5Y)2.9
EPS Next 2Y8.99%
EPS Next 3Y8.88%
5. Dividend
5.1 Amount
DGX has a Yearly Dividend Yield of 1.90%. 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 2.95. DGX pays more dividend than 87.85% of the companies in the same industry.
DGX's Dividend Yield is comparable with the S&P500 average which is at 2.29.
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.9% |
5.2 History
The dividend of DGX is nicely growing with an annual growth rate of 6.92%!
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
38.22% of the earnings are spent on dividend by DGX. This is a low number and sustainable payout ratio.
DGX's earnings are growing more than its dividend. This makes the dividend growth sustainable.
DP38.22%
EPS Next 2Y8.99%
EPS Next 3Y8.88%
172.24
+0.1 (+0.06%)
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 Change1.19%
Ins Owners0.3%
Ins Owner Change2.34%
Market Cap19.12B
Analysts79.13
Price Target175.53 (1.91%)
Short Float %2.34%
Short Ratio2.79
Dividend
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Dividend Yield | 1.9% |
Yearly Dividend2.98
Dividend Growth(5Y)6.92%
DP38.22%
Div Incr Years13
Div Non Decr Years20
Ex-Date
Surprises & Revisions
EPS beat(2)2
Avg EPS beat(2)3.18%
Min EPS beat(2)0.8%
Max EPS beat(2)5.56%
EPS beat(4)3
Avg EPS beat(4)3.7%
Min EPS beat(4)-0.44%
Max EPS beat(4)8.87%
EPS beat(8)7
Avg EPS beat(8)2.33%
EPS beat(12)11
Avg EPS beat(12)3.09%
EPS beat(16)15
Avg EPS beat(16)5.43%
Revenue beat(2)2
Avg Revenue beat(2)1.16%
Min Revenue beat(2)0.65%
Max Revenue beat(2)1.68%
Revenue beat(4)3
Avg Revenue beat(4)1.01%
Min Revenue beat(4)-0.7%
Max Revenue beat(4)2.42%
Revenue beat(8)7
Avg Revenue beat(8)1.53%
Revenue beat(12)10
Avg Revenue beat(12)1.79%
Revenue beat(16)14
Avg Revenue beat(16)2.72%
PT rev (1m)0.23%
PT rev (3m)7.62%
EPS NQ rev (1m)0.95%
EPS NQ rev (3m)1.09%
EPS NY rev (1m)-0.43%
EPS NY rev (3m)-0.46%
Revenue NQ rev (1m)0.79%
Revenue NQ rev (3m)8.43%
Revenue NY rev (1m)0.84%
Revenue NY rev (3m)0.78%
Valuation
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| PE | 19.1 | ||
| Fwd PE | 17.56 | ||
| P/S | 1.94 | ||
| P/FCF | 21.03 | ||
| P/OCF | 14.33 | ||
| P/B | 2.82 | ||
| P/tB | N/A | ||
| EV/EBITDA | 13.02 |
EPS(TTM)9.02
EY5.24%
EPS(NY)9.81
Fwd EY5.69%
FCF(TTM)8.19
FCFY4.75%
OCF(TTM)12.02
OCFY6.98%
SpS88.94
BVpS61.06
TBVpS-34.6
PEG (NY)2.18
PEG (5Y)2.9
Profitability
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| ROA | 5.36% | ||
| ROE | 12.78% | ||
| ROCE | 10.08% | ||
| ROIC | 7.81% | ||
| ROICexc | 8.12% | ||
| ROICexgc | 38.76% | ||
| OM | 14.28% | ||
| PM (TTM) | 8.77% | ||
| GM | 33.15% | ||
| FCFM | 9.21% |
ROA(3y)6.25%
ROA(5y)8.71%
ROE(3y)14.08%
ROE(5y)18.83%
ROIC(3y)8.8%
ROIC(5y)10.99%
ROICexc(3y)9.16%
ROICexc(5y)11.72%
ROICexgc(3y)39.5%
ROICexgc(5y)46.93%
ROCE(3y)11.44%
ROCE(5y)14.33%
ROICexcg growth 3Y-17.15%
ROICexcg growth 5Y-5.33%
ROICexc growth 3Y-22.47%
ROICexc growth 5Y-5.01%
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-Score5
Asset Turnover0.61
Health
| Industry Rank | Sector Rank | ||
|---|---|---|---|
| Debt/Equity | 0.83 | ||
| Debt/FCF | 6.84 | ||
| Debt/EBITDA | 2.95 | ||
| Cap/Depr | 86.21% | ||
| Cap/Sales | 4.31% | ||
| Interest Coverage | 5.38 | ||
| Cash Conversion | 70.1% | ||
| Profit Quality | 104.97% | ||
| Current Ratio | 1.1 | ||
| Quick Ratio | 1.02 | ||
| Altman-Z | 2.95 |
F-Score5
WACC8.25%
ROIC/WACC0.95
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)3.56%
EPS 3Y-14.1%
EPS 5Y6.58%
EPS Q2Q%8.37%
EPS Next Y8.75%
EPS Next 2Y8.99%
EPS Next 3Y8.88%
EPS Next 5Y9.47%
Revenue 1Y (TTM)6.7%
Revenue growth 3Y-2.91%
Revenue growth 5Y5.02%
Sales Q2Q%14.55%
Revenue Next Year9.55%
Revenue Next 2Y6.65%
Revenue Next 3Y5.72%
Revenue Next 5Y3.52%
EBIT growth 1Y7.14%
EBIT growth 3Y-17.38%
EBIT growth 5Y1.28%
EBIT Next Year42.87%
EBIT Next 3Y17.2%
EBIT Next 5YN/A
FCF growth 1Y5.21%
FCF growth 3Y-20.8%
FCF growth 5Y1.52%
OCF growth 1Y4.87%
OCF growth 3Y-15.78%
OCF growth 5Y1.42%