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Should Value Investors Buy Universal Health Services (UHS) Stock?
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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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
One company value investors might notice is Universal Health Services (UHS - Free Report) . UHS is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock holds a P/E ratio of 8.83, while its industry has an average P/E of 14.37. Over the past year, UHS's Forward P/E has been as high as 14.18 and as low as 7.60, with a median of 9.66.
We also note that UHS holds a PEG ratio of 0.74. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. UHS's PEG compares to its industry's average PEG of 1.34. Over the last 12 months, UHS's PEG has been as high as 0.79 and as low as 0.48, with a median of 0.62.
Value investors also use the P/S ratio. The P/S ratio 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. UHS has a P/S ratio of 0.8. This compares to its industry's average P/S of 0.84.
Finally, investors should note that UHS has a P/CF ratio of 6.60. 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. UHS's P/CF compares to its industry's average P/CF of 8. Within the past 12 months, UHS's P/CF has been as high as 10.90 and as low as 5.42, with a median of 6.97.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Universal Health Services is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, UHS feels like a great value stock at the moment.
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Should Value Investors Buy Universal Health Services (UHS) 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.
Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use a variety of methods, including tried-and-true valuation metrics, to find these stocks.
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.
One company value investors might notice is Universal Health Services (UHS - Free Report) . UHS is currently sporting a Zacks Rank #2 (Buy) and an A for Value. The stock holds a P/E ratio of 8.83, while its industry has an average P/E of 14.37. Over the past year, UHS's Forward P/E has been as high as 14.18 and as low as 7.60, with a median of 9.66.
We also note that UHS holds a PEG ratio of 0.74. This figure is similar to the commonly-used P/E ratio, with the PEG ratio also factoring in a company's expected earnings growth rate. UHS's PEG compares to its industry's average PEG of 1.34. Over the last 12 months, UHS's PEG has been as high as 0.79 and as low as 0.48, with a median of 0.62.
Value investors also use the P/S ratio. The P/S ratio 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. UHS has a P/S ratio of 0.8. This compares to its industry's average P/S of 0.84.
Finally, investors should note that UHS has a P/CF ratio of 6.60. 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. UHS's P/CF compares to its industry's average P/CF of 8. Within the past 12 months, UHS's P/CF has been as high as 10.90 and as low as 5.42, with a median of 6.97.
These figures are just a handful of the metrics value investors tend to look at, but they help show that Universal Health Services is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, UHS feels like a great value stock at the moment.