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RISK CONCERN
Investment Strategy, Risk Analysis, and Insights by Chartered Professionals
Quest Diagnostics Incorporated (XNYS:DGX) In-Depth Stock/Fundamental/Options Analysis Today
Primary Facts
DGX
Name:
QUEST DIAGNOSTICS INCORPORATED (XNYS:DGX)
Sector:
417.00M
Industry:
Diagnostics & Research
CEO:
Mr. Stephen Rusckowski
Total Employees:
40,000
Our Technological Advancement Rating
Our Rating:
B
Technological advancement compared to industry is -16.45% lower
ANALYSIS OF ALL CRITICAL FACTORS & RISKS RELATED TO THE STOCK & FUNDAMENTAL/LONG-TERM ANALYSIS OF QUEST DIAGNOSTICS INCORPORATED(DGX) AS PER DATA ANALYSIS OF LAST 3 YEARS AND COMPARISON WITH COMPETITORS/PEERS, AND DIAGNOSTICS & RESEARCH INDUSTRY. DATE: 07/09/2022
Primary Targets/Price Insights
Previous Close ($) :
125.13
One Month Price Target:
$125.84
Six Month Price Target :
$129.38
Likely Price in One Year's Time:
Ticker:
$133.64
Likely Trading Range Today Under (Normal Volatility)
$124.77
Price Upper limit ($) :
$125.6
Price Lower limit ($) :
Crash Risk Prep/Key Price Levels (High Volatility/Risk)
Price, as per data analysis, isn't likely to fall below:
Today:
$120.21
This week:
$114.12
This month :
$103.11
Other Primary facts
Market Cap:
14.62B
Market Cap Classification:
Mid Cap
Number of Shares
IPO Date:
116.61M
Best/Worst Daily Performance (Last 3+ Years)
Highest Daily Appreciation:
12.59%
-10.73%
Worst Daily Decline:
Our Options Trading Entry Points
Iron Condor entry points for options expiring in 1 week's time
Low risk (<2%) entry points
Buy Call:
Sell Call:
Buy Put:
Sell Put:
$147.97
$137.46
$102.29
$112.80
Medium risk (<10%) entry points
Buy Call
Sell Call
$134.04
Buy Put:
Sell Put:
$131.80
$116.19
$118.46
These entry points can be used for other strategies, such as butterflies, straddles, etc.
Risk-Adjusted returns (Sharpe Ratio) of
DGX
Sharpe Ratio:
1.85%
Comparison:
DGX, is amongst the top 40% stocks with highest risk-adjusted returns
Sharpe ratio is -26.53% lower than the industry
& is -18.84% lower than the market/S&P 500 average
Average Returns/Yield of
DGX
Daily returns:
0.04%
Weekly returns:
0.22%
Monthly returns:
0.89%
Yearly returns:
27.92%
Comparison of returns:
Average annual returns/yield (last 3 years) is -61.58% below industry average
Classification:
DGX, is amongst the top 60% highest yielding stocks in terms of daily returns
Results of T-Test of Returns:
0.83
Statistical test of Returns:
DGX has not yielded statistically significant higher returns when compared to the market
Volatility (measured by Standard Deviation)
Daily Volatility:
1.94%
Weekly Volatility:
4.33%
Monthly Volatility:
8.66%
Yearly Volatility:
30.02%
Volitlilty of last five days (Measured by Standard Deviation)
Average Volatility of this Week:
0.67%
Volatility in last five trading days has been -65.37% below long-term volatility
Value at Risk Analysis (VaR)
Daily VaR:
-3.93%
Weekly VaR:
-8.80%
Monthly VaR:
-17.60%
How Much Can the price of
DGX
Decline in a Recession?
Likely price decline in a recession:
Base case (decline):
-15%
Worst case (decline):
-60.95%
This translates to price declining to:
$106.30
This translates to price declining to:
$48.86
Severe Crash Probability
Risk of crash in next 6/12 months: Medium (<50%)
What is Value at Risk (VaR)?
Risk Fundamentals
DGX is a 24.19% riskier investment compared to the market/S&P 500 & is 6.39% riskier than Nasdaq (IXIC)
Risk (measured by volatility) is -49.82% below industry average
Overall, it is amongst the top 50% most risky stocks
Beta Examination of
DGX
Beta in relation to market/S&P 500--1.01
Expected beta in 1 year's time:
0.667
Expected beta in 3 year's time:
0.943
Unlevered (debt free) Beta:
0.655
Beta in relation to Nasdaq (XNAS):
0.489
Beta in relation to all global stocks::
0.643
Beta Comparison & Analysis
Beta of competitors/peers::
1.011
Beta is 0.04% higher than peers
Average Industry Beta:
1.181
Beta is -14.34% below industry average
Sustainable Growth Rate Analysis
Sustainable growth rate for this stock/firm:
26.85%
Sustainable growth rate is -49.17% below industry average
Alpha provided | Alpha Analysis
Alpha provided:
0.006
Alpha is -96.14% below industry average alpha yield
Alpha is 41% compared to market & is healthy
Analysis of Cost of Capital of
DGX
Equity cost of capital:
0.101
Equity cost of capital is -10.32% below industry mean WACC
Unlevered (without debt) cost of capital:
6.52%
Before-tax cost of debt:
3.22%
After-tax cost of debt:
2.54%
Overall debt rating:
High AA grade (second highest grade)
Weighted average cost of capital (WACC):
2.54%
WACC is -13.84% below industry mean WACC
Key Per-Share Metrics & Analysis
Revenue per share:
$91.58
Revenue growth rate per share of (3Y):
2.25
Annual revenue growth rate is -50.83% below industry average
EPS:
$15.01
Expected Annual growth rate of EPS (3Y):
34.66%
Expected future EPS growth rate is 29.13% higher than the Diagnostics & Research industry
Free cash flow (FCF) per share:
$13.10
Balance sheet equity growth per share: 28.44%
Equity growth rate per share is -1679.80% lower than the industry
Debt per share
$38.65
EBITDA per share
$25.71
Valuation Analysis Today of
DGX
P/E Ratio:
10.41
P/E Ratio of Competitors/Peers:
22.4
P/E ratio is -53.53% lower than main peers & is -72.00% lower than the industry
Stock price/value with industry average P/E ratio: $558.02
DGX is -77.58% undervalued if valued using industry average P/E ratio
Share value as per dividend discount (DDM) model: $59.84
Present value of the expected future dividends only: $34.26
P/S (Price to Sales ratio):
1.37
Price to sales ratio is -85.62% below the industry mean
P/B (Price to book value ratio):
2.25
Price to free cash flow: 9.55
Price to free cash flow ratio is -76.51% lower than the industry
Net income growth rate (3Y):
199.71%
Net income growth rate is -187.38% lower than the industry average net income growth rate
Dividend Analysis
Dividend payout rate: 3.93%
Dividend yeild: 2.01%
Previous Dividend: $0.66
Previous adjusted dividend: $0.66
Previous Dividend: $2.52
Expected next dividend best case: $0.70
Expected next dividend worst case: $0.62
Average dividend payment (long-term): $0.59
Average dividend increase/decrease (growth rate) % per period: 2.54%
Expected next dividend payment date: 19/07/2022
Expected next dividend record date: 07/05/2022
Expected next dividend declaration date: 05/04/2022
Previous dividend payment date: 20/04/2022
Previous dividend record date: 04/06/2022
Previous dividend declaration date: 02/03/2022
Dividend History:
2022-04-05--$0.66
2021-10-04--$0.62
2021-04-06--$0.62
2022-01-18--$0.62
2021-07-06--$0.62
2021-01-19--$0.56
Dividend growth rate is -120.73% lower than the industry average
In-depth Debt & Leverage Analysis
Debt to equity ratio:
70.68%
Net debt to equity ratio:
61.96%
Debt to assets ratio:
33.53%
Net debt to assets ratio:
29.39%
Debt-to-asset ratio is -31.00% below industry average
Ability to repay debt:
Interest coverage ratio:
19.99
Interest coverage ratio is -171.25% less than industry average
Looking forward:
Debt growth rate:
-3.14%
Annual debt growth is -103% lower than industry average debt growth rate
Debt repayment rate in last quarter: 0.02%
Analysis of Key Statistics
Correlation of price movement with the market:
0.52
Statistical significance of correlation:
DGX has a statistically significant correlation with the market
Average Correlation of the industry with the market:
0.488
Stock price is 6.61% more correlated with the market, compared to the industry average correlation
R Squared (percentage of price movement explained by movement of the market):
0.488
Correlation of price movement with Nasdaq (^IXIC):
-0.005
Covariance of price movement with the market:
-0.006
Kurtosis
7.139
Returns have a significant fat-tails (leptokurtic), i.e., returns considerably higher or lower than the mean returns are more probable, compared to assets with normally distributed returns
Skewness of returns:
-0.063
Returns are, approximately, symmetrical
Fundamental Analysis & Dupont Analysis of
DGX
Gross Profit Margin Ratio:
153%
Operating Profit Margin Ratio:
20.92%
Operating profit margin is -118.59% lower than the industry
Net Profit Margin Ratio:
153%
Effective Tax Rate:
22.85%
Effective tax rate is 19.05% higher than the industry
Dupont Method
Net Profit Margin
Return on Equity Ratio (ROE):
×
ROA
=
×
29.50%
Return on equity (ROE) is 40.40% higher than the industry
Financial Leverage
Asset Turnover Ratio (ROA):
13.99%
Return on assets (ROA) is -105.19% lower than the industry
Financial Leverage:
1.5x
Current Ratio:
1.46
Current ratio is -70.70% below industry average
Cash Conversion Cycle (days):
51.5
Cash conversion cycle is 3.74% above industry average
The remaining useful life of property plant & equipment is: 24.8 years
Stock based compensation to net income ratio:
0.96%
In-depth Efficiency Analysis
Revenue generated per employee:
267.0K
Each employee generates -28% less revenue than industry average revenue per employee
EBITDA generated per employee:
75.0K
Each employee generates 150% more EBITDA than industry average revenue per employee
Profit generated per employee:
47.0K
Each employee generates 194% more net income/profit than industry average revenue per employee
Free cash flow (FCF) generated per employee:
10.4K
Each employee generates -579% less free cash flow than industry average revenue per employee
Assets/Capital per employee
274.2K
Each employee generates -579% less free cash flow than industry average revenue per employee
Research & Development (R&D) Analysis
-
-
Competitors/Peer firms of
DGX
Fresenius Medical Care AG & Co KGaA (XNYS:FMS)
Catalent, Inc. (XNYS:CTLT)
BIO-RAD LABORATORIES, INC. (XNYS:BIO)
THE COOPER COMPANIES, INC. (XNYS:COO)
WATERS CORPORATION (XNYS:WAT)
MOLINA HEALTHCARE, INC. (XNYS:MOH)
CHARLES RIVER LABORATORIES INTERNATIONAL, INC. (XNYS:CRL)
SMITH & NEPHEW PLC (XNYS:SNN)
PERKINELMER, INC. (XNYS:PKI)
Current Analyst Ratings
Strong buy�4%
Buy�17%
Hold�58%
Sell�4%
Strong sell�0%
Overall analyst sentiment is: Hold
Income Statement
Period:
TTM
Date:
3/31/22
Revenue:
10.68B
Cost of Revenue:
Gross Profit:
R&D Expense
General & Admin Expenses:
Selling, General & Admin Expenses
Sales and Marketing Expenses
Other Expenses :
Operating Expenses :
Cost & Expenses :
Interest Income:
Interest Expenses:
Depreciation & Amortization:
EBITDA:
Operating Income:
Other Income Expenses:
Income Before Tax:
Income Tax Expense:
Net Income:
Balance Sheet
Date:
Calendar Year:
Period:
Cash & Cash Equivalents:
Short Term Investments:
Cash & Short Term Investments:
Net Receivables:
Inventory:
Other Current Assets:
Total Current Assets:
PP&E:
Goodwill:
Intangible Assets:
Long Term Investments:
Tax Assets:
Other Non-Current Assets:
Total Non-Current Assets:
Other Assets:
Total Assets:
Accounts Payable:
Short Term Debt:
Tax Payables:
Deferred Revenue:
Other Current Liabilities:
Total Current Liabilities:
Long Term Debt:
Other Non-Current Liabilities:
Total Non Current Liabilities:
Other Liabilities:
Total Liabilities:
Common Stock:
Retained Earnings:
Accumulated Other Comprehensive Loss:
Other Total Stockholders' Equity:
Total Stockholders' Equity:
Total Liabilities and Stockholders' Equity:
Total Investments:
Total Debt:
Net Debt:
6.60B
4.08B
-
-
1.75B
-
101.00M
1.85B
-
150.00M
413.00M
3.00B
2.23B
1.88B
2.43B
554.00M
1.88B
Statement of Cash Flow
Date:
Period:
106.00M
Differed Income Tax :
- 43000.00K
Stock Based Compensation :
18.00M
Change in Working Capital :
22.00M
Accounts Receivables:
72.00M
Other Working Capital:
20.00M
Other Non-Cash Items:
4.00M
Net Cash Provided by Operating Activities:
480.00M
Investments in PP&E:
-
Net Acquisitions:
- 105000.00K
Purchases of Investments:
- 1000.00K
Sales/Maturities of Investments:
Other Investing Activities:
Net Cash Used for Investing Activities:
Debt Repayment:
Common Stock Issued:
Common Stock Repurchased:
Dividend Paid:
Other Financing Activities:
Net Cash Used Provided by Financing Activities:
Effect of FOREX on Changes in Cash:
Net Changes in Cash:
Cash at End of Period:
Cash at Beginning of Period:
Operating Cash Flow:
Capital Expenditure:
Free Cash Flow (FCF):
3/31/22
2022
Q1
712.00M
-
712.00M
1.37B
197.00M
195.00M
2.48B
2.29B
7.20B
1.17B
155.00M
-
155.00M
10.97B
-
13.44B
-
156.00M
-
-
1.54B
1.70B
4.51B
742.00M
5.25B
-
6.95B
2.00M
7.93B
- 16000.0K
-
March 31, 2022 at 6:00:00 AM
8.45B
6.38B
13.33B
-
4.66B
4.0B
-
- 63000.00K
- 169000.00K
- 1000.00K
-
- 373000.00K
- 74000.00K
- 23000.00K
- 471000.00K
-
- 160000.00K
712.00M
872.00M
480.00M
- 63000.00K
417.00M
Our Proprietary Portfolio Rating
Our Rating:
D
Price Forecast/Expected Price in Next 5 Years of
DGX
2023
2024
2025
2026
2027
$134.31
$266.30
$284.41
$303.75
$324.40