Should Value Investors Buy Quest Diagnostics (DGX) Stock?
Here at Zacks, our focus is on the proven Zacks Rank system, which emphasizes earnings estimates and estimate revisions to find great stocks. Nevertheless, we are always paying attention to the latest value, growth, and momentum trends to underscore strong picks.
Of these, value investing is easily one of the most popular ways to find great stocks in any market environment. 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.
Quest Diagnostics (DGX) is a stock many investors are watching right now. DGX is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock is trading with P/E ratio of 11.58 right now. For comparison, its industry sports an average P/E of 18.72. Over the past 52 weeks, DGX's Forward P/E has been as high as 23.41 and as low as 11.17, with a median of 15.77.
Investors should also recognize that DGX has a P/B ratio of 2.52. The P/B is a method of comparing a stock's market value to its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 3.08. Over the past year, DGX's P/B has been as high as 2.97 and as low as 1.72, with a median of 2.59.
Finally, we should also recognize that DGX has a P/CF ratio of 11.37. This metric focuses on a firm's operating cash flow and is often used to find stocks that are undervalued based on the strength of their cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 26.35. Within the past 12 months, DGX's P/CF has been as high as 16.22 and as low as 8.61, with a median of 12.85.
Value investors will likely look at more than just these metrics, but the above data helps show that Quest Diagnostics is likely undervalued currently. And when considering the strength of its earnings outlook, DGX sticks out at as one of the market's strongest value stocks.
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
Quest Diagnostics Incorporated (DGX) : Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
