NYSE:DGX

Stock Analysis Report

Executive Summary

Quest Diagnostics Incorporated provides diagnostic testing, information, and services in the United States and internationally.

Rewards

Trading at 25.1% below its fair value

Earnings grew by 13.9% over the past year

Pays a high and reliable dividend of 1.97%

Risk Analysis

Has a high level of debt



Snowflake Analysis

Undervalued with solid track record and pays a dividend.


Similar Companies

Share Price & News

How has Quest Diagnostics's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: DGX has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-0.009%

DGX

0.1%

US Healthcare

0.06%

US Market


1 Year Return

28.5%

DGX

12.8%

US Healthcare

19.3%

US Market

Return vs Industry: DGX exceeded the US Healthcare industry which returned 14.4% over the past year.

Return vs Market: DGX exceeded the US Market which returned 20.3% over the past year.


Shareholder returns

DGXIndustryMarket
7 Day-0.009%0.1%0.06%
30 Day4.0%1.2%1.7%
90 Day6.5%7.6%9.0%
1 Year31.2%28.5%14.3%12.8%21.8%19.3%
3 Year23.1%16.0%50.4%43.6%49.5%39.9%
5 Year78.1%60.9%61.8%50.7%73.1%54.1%

Price Volatility Vs. Market

How volatile is Quest Diagnostics's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Quest Diagnostics undervalued compared to its fair value and its price relative to the market?

25.4%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: DGX ($113.48) is trading below our estimate of fair value ($151.5)

Significantly Below Fair Value: DGX is trading below fair value by more than 20%.


Price To Earnings Ratio

PE vs Industry: DGX is good value based on its PE Ratio (18.2x) compared to the Healthcare industry average (29.1x).

PE vs Market: DGX is good value based on its PE Ratio (18.2x) compared to the US market (18.3x).


Price to Earnings Growth Ratio

PEG Ratio: DGX is poor value based on its PEG Ratio (54.7x)


Price to Book Ratio

PB vs Industry: DGX is good value based on its PB Ratio (2.7x) compared to the US Healthcare industry average (3.1x).


Next Steps

Future Growth

How is Quest Diagnostics forecast to perform in the next 1 to 3 years based on estimates from 17 analysts?

0.3%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: DGX's forecast earnings growth (0.3% per year) is below the savings rate (1.7%).

Earnings vs Market: DGX's earnings (0.3% per year) are forecast to grow slower than the US market (14.2% per year).

High Growth Earnings: DGX's earnings are forecast to grow, but not significantly.

Revenue vs Market: DGX's revenue (2.2% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: DGX's revenue (2.2% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: DGX's Return on Equity is forecast to be low in 3 years time (13.3%).


Next Steps

Past Performance

How has Quest Diagnostics performed over the past 5 years?

5.7%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: DGX has high quality earnings.

Growing Profit Margin: DGX's current net profit margins (10.8%) are higher than last year (9.7%).


Past Earnings Growth Analysis

Earnings Trend: DGX's earnings have grown by 5.7% per year over the past 5 years.

Accelerating Growth: DGX's earnings growth over the past year (13.9%) exceeds its 5-year average (5.7% per year).

Earnings vs Industry: DGX earnings growth over the past year (13.9%) exceeded the Healthcare industry 11.1%.


Return on Equity

High ROE: DGX's Return on Equity (15.4%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Quest Diagnostics's financial position?


Financial Position Analysis

Short Term Liabilities: DGX's short term assets ($2.5B) exceed its short term liabilities ($2.0B).

Long Term Liabilities: DGX's short term assets ($2.5B) do not cover its long term liabilities ($5.1B).


Debt to Equity History and Analysis

Debt Level: DGX's debt to equity ratio (82.8%) is considered high.

Reducing Debt: DGX's debt to equity ratio has reduced from 86.5% to 82.8% over the past 5 years.

Debt Coverage: DGX's debt is well covered by operating cash flow (26.1%).

Interest Coverage: DGX's interest payments on its debt are well covered by EBIT (6.9x coverage).


Balance Sheet

Inventory Level: DGX has a low level of unsold assets or inventory.

Debt Coverage by Assets: DGX's debt is not covered by short term assets (assets are 0.5x debt).


Next Steps

Dividend

What is Quest Diagnostics's current dividend yield, its reliability and sustainability?

1.99%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Quest Diagnostics before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company2.0%marketbottom25%1.4%markettop25%3.7%industryaverage1.4%forecastin3Years2.1%

Current dividend yield vs market & industry

Notable Dividend: DGX's dividend (1.97%) is higher than the bottom 25% of dividend payers in the US market (1.44%).

High Dividend: DGX's dividend (1.97%) is low compared to the top 25% of dividend payers in the US market (3.73%).


Stability and Growth of Payments

Stable Dividend: DGX's dividends per share have been stable in the past 10 years.

Growing Dividend: DGX's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonably low payout ratio (34%), DGX's dividend payments are well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: DGX's dividends in 3 years are forecast to be well covered by earnings (33.3% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

6.7yrs

Average management tenure


CEO

Steve Rusckowski (62yo)

7.8yrs

Tenure

US$9,953,287

Compensation

Mr. Stephen H. Rusckowski, also known as Steve, has been the Chief Executive Officer and President of Quest Diagnostics Incorporated since May 01, 2012 and has been its Chairman since January 01, 2017. Mr. ...


CEO Compensation Analysis

Compensation vs Market: Steve's total compensation ($USD9.95M) is about average for companies of similar size in the US market ($USD10.78M).

Compensation vs Earnings: Steve's compensation has been consistent with company performance over the past year.


Leadership Team

NamePositionTenureCompensationOwnership
Stephen Rusckowski
Chairman7.8yrsUS$9.95m0.16% $24.0m
Mark Guinan
Executive VP & CFO6.6yrsUS$3.23m0.050% $7.4m
Catherine Doherty
Senior VP and Group Executive of Clinical Franchise Solutions & Marketing0yrsUS$2.32m0.054% $8.1m
James Davis
Executive Vice President of General Diagnostics6.8yrsUS$3.07m0.027% $4.1m
Carrie Manner
Senior Vice President of Advanced Diagnostics3yrsUS$2.89m0.016% $2.4m
Michael Deppe
VP, Corporate Controller0.8yrsno data0.018% $2.7m
Gabrielle Wolfson
Senior VP and Chief Information & Digital Officer1yrsno datano data
Shawn Bevec
Vice President of Investor Relation0yrsno datano data
Michael Prevoznik
Senior VP & General Counsel20.5yrsUS$2.09m0.033% $5.0m
Timothy Sharpe
Vice President of Compliance20.2yrsno datano data

6.7yrs

Average Tenure

56yo

Average Age

Experienced Management: DGX's management team is seasoned and experienced (6.7 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Stephen Rusckowski
Chairman7.8yrsUS$9.95m0.16% $24.0m
Timothy Main
Independent Director6.1yrsUS$284.98k0.0097% $1.5m
Timothy Ring
Independent Director8.2yrsUS$291.48kno data
Gary Pfeiffer
Independent Director15.2yrsUS$316.48k0.015% $2.2m
Gail Wilensky
Independent Director23.1yrsUS$298.48k0.021% $3.2m
Daniel Stanzione
Lead Independent Director3.1yrsUS$333.98k0.029% $4.3m
Denise Morrison
Independent Director1yrsno datano data
Vicky Gregg
Independent Director5.6yrsUS$280.98k0.0091% $1.4m
Helen Torley
Independent Director1.8yrsUS$232.67kno data

5.6yrs

Average Tenure

64yo

Average Age

Experienced Board: DGX's board of directors are considered experienced (5.6 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Company Information

Quest Diagnostics Incorporated's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Quest Diagnostics Incorporated
  • Ticker: DGX
  • Exchange: NYSE
  • Founded: 1967
  • Industry: Health Care Services
  • Sector: Healthcare
  • Market Cap: US$15.008b
  • Shares outstanding: 133.00m
  • Website: https://www.questdiagnostics.com

Number of Employees


Location

  • Quest Diagnostics Incorporated
  • 500 Plaza Drive
  • Secaucus
  • New Jersey
  • 7094
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
DGXNYSE (New York Stock Exchange)YesCommon StockUSUSDDec 1996
QDIDB (Deutsche Boerse AG)YesCommon StockDEEURDec 1996
0KSXLSE (London Stock Exchange)YesCommon StockGBUSDDec 1996
DGX *BMV (Bolsa Mexicana de Valores)YesCommon StockMXMXNDec 1996
Q1UE34BOVESPA (Bolsa de Valores de Sao Paulo)BDR EACH 2 REPR 1 COMBRBRLJan 2020

Biography

Quest Diagnostics Incorporated provides diagnostic testing, information, and services in the United States and internationally. The company develops and delivers diagnostic testing information and services, such as routine testing, non-routine and advanced clinical testing, anatomic pathology testing, and other diagnostic information services. It offers diagnostic information services primarily under the Quest Diagnostics brand, as well as under the AmeriPath, Dermpath Diagnostics, Athena Diagnostics, ExamOne, and Quanum brands to patients, clinicians, hospitals, integrated delivery networks, health plans, employers, and accountable care organizations through a network of laboratories, patient service centers, phlebotomists in physician offices, call centers and mobile paramedics, nurses, and other health and wellness professionals. The company also offers risk assessment services for the life insurance industry; and health information technology solutions for healthcare organizations and clinicians. Quest Diagnostics Incorporated has a strategic collaboration with hc1. The company was founded in 1967 and is headquartered in Secaucus, New Jersey. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/21 00:32
End of Day Share Price2020/02/20 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.