Head-To-Head Analysis: Quest Diagnostics (NYSE:DGX) versus Its Competitors

Quest Diagnostics (NYSE: DGX) is one of 51 publicly-traded companies in the “Healthcare Facilities & Services” industry, but how does it contrast to its peers? We will compare Quest Diagnostics to related companies based on the strength of its profitability, analyst recommendations, institutional ownership, dividends, valuation, earnings and risk.

Insider and Institutional Ownership

87.1% of Quest Diagnostics shares are owned by institutional investors. Comparatively, 69.7% of shares of all “Healthcare Facilities & Services” companies are owned by institutional investors. 1.8% of Quest Diagnostics shares are owned by company insiders. Comparatively, 16.0% of shares of all “Healthcare Facilities & Services” companies are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Quest Diagnostics and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Quest Diagnostics 9.06% 13.61% 6.81%
Quest Diagnostics Competitors 6.86% 0.59% 0.64%

Analyst Ratings

This is a summary of recent recommendations and price targets for Quest Diagnostics and its peers, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Quest Diagnostics 1 12 6 0 2.26
Quest Diagnostics Competitors 200 1339 1885 35 2.51

Quest Diagnostics currently has a consensus price target of $104.42, indicating a potential upside of 9.13%. As a group, “Healthcare Facilities & Services” companies have a potential downside of 5.53%. Given Quest Diagnostics’ higher probable upside, equities research analysts clearly believe Quest Diagnostics is more favorable than its peers.

Valuation and Earnings

This table compares Quest Diagnostics and its peers revenue, earnings per share (EPS) and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Quest Diagnostics $7.59 billion $1.44 billion 20.06
Quest Diagnostics Competitors $5.41 billion $832.36 million 22.82

Quest Diagnostics has higher revenue and earnings than its peers. Quest Diagnostics is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Dividends

Quest Diagnostics pays an annual dividend of $1.80 per share and has a dividend yield of 1.9%. Quest Diagnostics pays out 37.7% of its earnings in the form of a dividend. As a group, “Healthcare Facilities & Services” companies pay a dividend yield of 0.9% and pay out 57.3% of their earnings in the form of a dividend. Quest Diagnostics has increased its dividend for 5 consecutive years. Quest Diagnostics is clearly a better dividend stock than its peers, given its higher yield and lower payout ratio.

Risk & Volatility

Quest Diagnostics has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500. Comparatively, Quest Diagnostics’ peers have a beta of 1.00, indicating that their average share price is 0% more volatile than the S&P 500.

Summary

Quest Diagnostics beats its peers on 9 of the 15 factors compared.

Quest Diagnostics Company Profile

Quest Diagnostics Incorporated is a provider of diagnostic information services. The Company operates through two businesses: Diagnostic Information Services and Diagnostic Solutions. The Diagnostic Information Services business develops and delivers diagnostic testing information and services, providing insights that empower and enable a range of customers, including patients, clinicians, hospitals, integrated delivery networks (IDNs), health plans, employers and accountable care organizations (ACOs). Its Diagnostic Solutions group includes its risk assessment services business, which offers solutions for insurers, and its healthcare information technology businesses, which offers solutions for healthcare providers. The Company’s services are provided under the Quest Diagnostics brand, but it also provides services under other brands, including AmeriPath, Dermpath Diagnostics, Focus Diagnostics, Athena Diagnostics, ExamOne, Quanum and Care360.

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