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.
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.
On top of the Zacks Rank, investors can also look at our innovative Style Scores system to find stocks with specific traits. For example, value investors will want to focus on the "Value" category. Stocks with high Zacks Ranks and "A" grades for Value will be some of the highest-quality value stocks on the market today.
DaVita HealthCare (DVA) is a stock many investors are watching right now. DVA is currently sporting a Zacks Rank of #2 (Buy), as well as a Value grade of A. The stock is trading with a P/E ratio of 13.62, which compares to its industry's average of 20.77. Over the past 52 weeks, DVA's Forward P/E has been as high as 15.61 and as low as 10.27, with a median of 12.62.
Investors should also note that DVA holds a PEG ratio of 1.50. 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 2.02. DVA's PEG has been as high as 1.59 and as low as 0.47, with a median of 0.59, all within 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 0.92. This compares to its industry's average P/S of 1.16.
Finally, investors will want to recognize that DVA has a P/CF ratio of 7.45. This data point considers a firm's operating cash flow and is frequently used to find companies that are undervalued when considering their solid cash outlook. DVA's P/CF compares to its industry's average P/CF of 26.35. Within the past 12 months, DVA's P/CF has been as high as 14.30 and as low as 5.46, with a median of 7.51.
These figures are just a handful of the metrics value investors tend to look at, but they help show that DaVita HealthCare is likely being undervalued right now. Considering this, as well as the strength of its earnings outlook, DVA feels like a great value stock at the moment.
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