Analyzing Quest Diagnostics (DGX) and Fresenius Medical Care Corporation (FMS)
Quest Diagnostics (NYSE: DGX) and Fresenius Medical Care Corporation (NYSE:FMS) are both large-cap medical companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, dividends, risk, institutional ownership, profitability and valuation.
Valuation & Earnings
This table compares Quest Diagnostics and Fresenius Medical Care Corporation’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Quest Diagnostics||$7.59 billion||1.89||$1.44 billion||$4.96||21.16|
|Fresenius Medical Care Corporation||$20.52 billion||1.46||$3.75 billion||$2.18||22.36|
Fresenius Medical Care Corporation has higher revenue and earnings than Quest Diagnostics. Quest Diagnostics is trading at a lower price-to-earnings ratio than Fresenius Medical Care Corporation, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
Quest Diagnostics has a beta of 0.69, indicating that its share price is 31% less volatile than the S&P 500. Comparatively, Fresenius Medical Care Corporation has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500.
This table compares Quest Diagnostics and Fresenius Medical Care Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Fresenius Medical Care Corporation||7.06%||11.57%||4.97%|
This is a summary of current recommendations for Quest Diagnostics and Fresenius Medical Care Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Fresenius Medical Care Corporation||0||3||7||0||2.70|
Quest Diagnostics presently has a consensus price target of $109.54, indicating a potential upside of 4.36%. Fresenius Medical Care Corporation has a consensus price target of $46.00, indicating a potential downside of 5.64%. Given Quest Diagnostics’ higher possible upside, research analysts plainly believe Quest Diagnostics is more favorable than Fresenius Medical Care Corporation.
Institutional & Insider Ownership
87.1% of Quest Diagnostics shares are held by institutional investors. Comparatively, 2.6% of Fresenius Medical Care Corporation shares are held by institutional investors. 1.8% of Quest Diagnostics shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Quest Diagnostics pays an annual dividend of $1.80 per share and has a dividend yield of 1.7%. Fresenius Medical Care Corporation pays an annual dividend of $0.37 per share and has a dividend yield of 0.8%. Quest Diagnostics pays out 36.3% of its earnings in the form of a dividend. Fresenius Medical Care Corporation pays out 17.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Fresenius Medical Care Corporation has increased its dividend for 5 consecutive years.
Quest Diagnostics beats Fresenius Medical Care Corporation on 12 of the 18 factors compared between the two stocks.
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.
Fresenius Medical Care Corporation Company Profile
Fresenius Medical Care AG & Co. KGaA is a kidney dialysis company. The Company provides dialysis care and related services to persons suffering from end-stage renal disease (ESRD), as well as other healthcare services. The Company’s segments include North America Segment, the Europe, Middle East and Africa (EMEA) Segment, the Asia-Pacific Segment and the Latin America Segment. The Company develops and manufactures a range of dialysis machines, systems and disposable products. As of December 31, 2016, the Company sold its products to customers in more than 120 countries and also used in its internal healthcare service operations. The Company’s Care Coordination services include coordinated delivery of pharmacy services, vascular, cardiovascular and endovascular specialty services, non-dialysis laboratory testing services, physician services, hospitalist and intensivist services, health plan services, ambulatory surgery center services and urgent care services.
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