Security Analysis

Security Analysis

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Security Analysis
Security Analysis
Quest Diagnostics (DGX)
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Quest Diagnostics (DGX)

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Value Stock Geek
May 12, 2024
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Security Analysis
Security Analysis
Quest Diagnostics (DGX)
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Key Statistics

EV/EBIT = 15.9x

ROE = 13.49%

Debt/Equity = 83%

FCF Yield = 4.6%

Dividend Yield = 2.2%

Market Cap = $15.36 billion

The Company

Quest Diagnostics (DGX) is a diagnostic testing company that serves a third of U.S. adults and collaborates with half of the nation's doctors and hospitals.

Quest participates in health plans covering approximately 90% of insured individuals in the U.S. In 2023, they processed a substantial volume of tests—approximately 206 million test requisitions.

Quest was established as a spin-off from Corning (which I profiled here) in 1996. Over the years, the company expanded significantly through strategic acquisitions and organic growth initiatives.

Quest boasts a nationwide network of over 2,300 patient service centers. These centers are benefiting from the increasing demand for diagnostic tests and personalized medicine.

Quest prioritizes patient convenience by offering accessible testing locations and digital services for scheduling appointments and accessing test results online. Patients also benefit from in-home blood draw services, allowing for convenient testing in the comfort of their own homes.

Quest's extensive network of locations makes it a highly convenient option for physicians and patients. Patients can easily choose a Quest location nearest their home for all their testing needs. Notably, Walmart stores often contain a Quest testing location.

The scheduling process is highly convenient, with appointments quickly booked online. In addition, Quest offers the flexibility of certain services being performed directly at the patient's home, further enhancing convenience and accessibility for individuals seeking diagnostic testing.

Quest provides an extensive menu of diagnostic tests that support physicians' ability to diagnose and manage patients effectively. In partnership with hospitals, Quest delivers lab services to enhance efficiency and optimize operations. Quest also collaborates with hospitals to manage lab services and can acquire hospital lab operations to improve overall performance.

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