Is DaVita HealthCare (DVA) a Great Value Stock Right Now?
The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find 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 fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.
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 HealthCare (DVA) is a stock many investors are watching right now. DVA is currently holding a Zacks Rank of #1 (Strong Buy) and a Value grade of A. The stock has a Forward P/E ratio of 13.11. This compares to its industry's average Forward P/E of 19.37. Over the past year, DVA's Forward P/E has been as high as 14.50 and as low as 9.37, with a median of 11.58.
Investors will also notice that DVA has a PEG ratio of 0.57. 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 1.48. Within the past year, DVA's PEG has been as high as 0.75 and as low as 0.42, with a median of 0.53.
Another notable valuation metric for DVA is its P/B ratio of 4.63. 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. DVA's current P/B looks attractive when compared to its industry's average P/B of 6.27. DVA's P/B has been as high as 4.68 and as low as 1.77, with a median of 2.30, over 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 0.83. This compares to its industry's average P/S of 1.23.
Finally, our model also underscores that DVA has a P/CF ratio of 10.68. This figure highlights a company's operating cash flow and can be used to find firms that are undervalued when considering their impressive cash outlook. This stock's P/CF looks attractive against its industry's average P/CF of 31.73. Over the past 52 weeks, DVA's P/CF has been as high as 14.30 and as low as 6.61, with a median of 12.15.
These are only a few of the key metrics included in DaVita HealthCare's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, DVA looks like an impressive value stock at the moment.
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