Is DaVita (DVA) Stock Undervalued Right Now?
While the proven Zacks Rank places an emphasis on earnings estimates and estimate revisions to find strong stocks, we also know that investors tend to develop their own individual strategies. With this in mind, we are always looking at value, growth, and momentum trends to discover great companies.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors use tried-and-true metrics and fundamental analysis to find companies that they believe are undervalued at their current share price levels.
In addition to the Zacks Rank, investors looking for stocks with specific traits can utilize our Style Scores system. Of course, value investors will be most interested in the system's "Value" category. Stocks with "A" grades for Value and high Zacks Ranks are among the best value stocks available at any given moment.
DaVita (DVA) is a stock many investors are watching right now. DVA is currently sporting a Zacks Rank of #1 (Strong Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 14.67 right now. For comparison, its industry sports an average P/E of 19.92. Over the past 52 weeks, DVA's Forward P/E has been as high as 15.73 and as low as 7.30, with a median of 11.98.
DVA is also sporting a PEG ratio of 1. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. DVA's industry currently sports an average PEG of 2.68. DVA's PEG has been as high as 1.87 and as low as 0.85, with a median of 1.22, all within the past year.
Value investors also use the P/S ratio. The P/S ratio is is calculated as price divided by sales. This is a popular metric because sales are harder to manipulate on an income statement, so they are often considered a better performance indicator. DVA has a P/S ratio of 0.8. This compares to its industry's average P/S of 1.16.
Finally, investors will want to recognize that DVA has a P/CF ratio of 7.66. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. DVA's current P/CF looks attractive when compared to its industry's average P/CF of 24.28. DVA's P/CF has been as high as 7.68 and as low as 4.38, with a median of 5.83, all within the past year.
Another great Medical - Outpatient and Home Healthcare stock you could consider is Encompass Health (EHC), which is a # 2 (Buy) stock with a Value Score of A.
Encompass Health is currently trading with a Forward P/E ratio of 19.74 while its PEG ratio sits at 1.68. Both of the company's metrics compare favorably to its industry's average P/E of 19.92 and average PEG ratio of 2.68.
EHC's Forward P/E has been as high as 21.45 and as low as 11.23, with a median of 17.84. During the same time period, its PEG ratio has been as high as 2.93, as low as 1.16, with a median of 1.90.
Furthermore, Encompass Health holds a P/B ratio of 3.46 and its industry's price-to-book ratio is 2.73. EHC's P/B has been as high as 3.52, as low as 1.84, with a median of 3.20 over the past 12 months.
These are just a handful of the figures considered in DaVita and Encompass Health's great Value grade. Still, they help show that the stock is likely being undervalued at the moment. Add this to the strength of its earnings outlook, and we can clearly see that DVA and EHC is an impressive value stock right now.
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DaVita Inc. (DVA) : Free Stock Analysis Report
Encompass Health Corporation (EHC) : Free Stock Analysis Report
