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Should Value Investors Buy Quest Diagnostics (DGX) Stock?
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Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Quest Diagnostics (DGX - Free Report) . DGX is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 16.58, which compares to its industry's average of 21.28. DGX's Forward P/E has been as high as 16.58 and as low as 13.44, with a median of 15.04, all within the past year.
Another notable valuation metric for DGX is its P/B ratio of 2.59. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 4.24. Over the past 12 months, DGX's P/B has been as high as 2.59 and as low as 2.10, with a median of 2.35.
Investors could also keep in mind Encompass Health (EHC - Free Report) , an Medical - Outpatient and Home Healthcare stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of Encompass Health are currently trading at a forward earnings multiple of 20.53 and a PEG ratio of 1.30 compared to its industry's P/E and PEG ratios of 21.28 and 1.79, respectively.
EHC's price-to-earnings ratio has been as high as 21.35 and as low as 16.27, with a median of 19.09, while its PEG ratio has been as high as 1.69 and as low as 1.20, with a median of 1.31, all within the past year.
Furthermore, Encompass Health holds a P/B ratio of 3.71 and its industry's price-to-book ratio is 4.24. EHC's P/B has been as high as 3.77, as low as 2.83, with a median of 3.41 over the past 12 months.
Value investors will likely look at more than just these metrics, but the above data helps show that Quest Diagnostics and Encompass Health are likely undervalued currently. And when considering the strength of its earnings outlook, DGX and EHC sticks out as one of the market's strongest value stocks.
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Should Value Investors Buy Quest Diagnostics (DGX) Stock?
Here at Zacks, we focus on our proven ranking system, which places an emphasis on earnings estimates and estimate revisions, to find winning stocks. But we also understand that investors develop their own strategies, so we are constantly looking at the latest trends in value, growth, and momentum to find strong companies for our readers.
Considering these trends, value investing is clearly one of the most preferred ways to find strong stocks in any type of market. Value investors rely on traditional forms of analysis on key valuation metrics to find stocks that they believe are undervalued, leaving room for profits.
Luckily, Zacks has developed its own Style Scores system in an effort to find stocks with specific traits. Value investors will be interested in the system's "Value" category. Stocks with both "A" grades in the Value category and high Zacks Ranks are among the strongest value stocks on the market right now.
One company to watch right now is Quest Diagnostics (DGX - Free Report) . DGX is currently sporting a Zacks Rank of #2 (Buy) and an A for Value. The stock is trading with a P/E ratio of 16.58, which compares to its industry's average of 21.28. DGX's Forward P/E has been as high as 16.58 and as low as 13.44, with a median of 15.04, all within the past year.
Another notable valuation metric for DGX is its P/B ratio of 2.59. The P/B ratio is used to compare a stock's market value with its book value, which is defined as total assets minus total liabilities. This stock's P/B looks solid versus its industry's average P/B of 4.24. Over the past 12 months, DGX's P/B has been as high as 2.59 and as low as 2.10, with a median of 2.35.
Investors could also keep in mind Encompass Health (EHC - Free Report) , an Medical - Outpatient and Home Healthcare stock with a Zacks Rank of # 2 (Buy) and Value grade of A.
Shares of Encompass Health are currently trading at a forward earnings multiple of 20.53 and a PEG ratio of 1.30 compared to its industry's P/E and PEG ratios of 21.28 and 1.79, respectively.
EHC's price-to-earnings ratio has been as high as 21.35 and as low as 16.27, with a median of 19.09, while its PEG ratio has been as high as 1.69 and as low as 1.20, with a median of 1.31, all within the past year.
Furthermore, Encompass Health holds a P/B ratio of 3.71 and its industry's price-to-book ratio is 4.24. EHC's P/B has been as high as 3.77, as low as 2.83, with a median of 3.41 over the past 12 months.
Value investors will likely look at more than just these metrics, but the above data helps show that Quest Diagnostics and Encompass Health are likely undervalued currently. And when considering the strength of its earnings outlook, DGX and EHC sticks out as one of the market's strongest value stocks.