UNIVERSAL HEALTH SERVICES-B (NYSE:UHS) is a prime example of a stock that offers more than what meets the eye in terms of fundamentals.

Our stock screening tool has identified UNIVERSAL HEALTH SERVICES-B (NYSE:UHS) as an undervalued gem with strong fundamentals. UHS boasts decent financial health and profitability while maintaining an attractive price point. We'll break it down further.

Valuation Assessment of UHS

ChartMill assigns a Valuation Rating to each stock, ranging from 0 to 10. This rating is calculated by analyzing different valuation elements, such as price to earnings and free cash flow, both in absolute terms and relative to the market and industry. In the case of UHS, the assigned 8 reflects its valuation:

• With a Price/Earnings ratio of 10.91, the valuation of UHS can be described as very reasonable.
• Based on the Price/Earnings ratio, UHS is valued cheaply inside the industry as 87.85% of the companies are valued more expensively.
• The average S&P500 Price/Earnings ratio is at 29.14. UHS is valued rather cheaply when compared to this.
• UHS is valuated reasonably with a Price/Forward Earnings ratio of 9.90.
• Based on the Price/Forward Earnings ratio, UHS is valued cheaper than 89.72% of the companies in the same industry.
• UHS is valuated cheaply when we compare the Price/Forward Earnings ratio to 22.10, which is the current average of the S&P500 Index.
• Based on the Enterprise Value to EBITDA ratio, UHS is valued cheaply inside the industry as 85.05% of the companies are valued more expensively.
• Compared to the rest of the industry, the Price/Free Cash Flow ratio of UHS indicates a rather cheap valuation: UHS is cheaper than 86.92% of the companies listed in the same industry.
• UHS has a very decent profitability rating, which may justify a higher PE ratio.

Looking at the Profitability

Discover ChartMill's exclusive Profitability Rating, a proprietary metric that assesses stocks on a scale of 0 to 10. It takes into consideration various profitability ratios and margins, both in absolute terms and relative to industry peers. Notably, UHS has achieved a 7:

• Looking at the Return On Assets, with a value of 7.89%, UHS belongs to the top of the industry, outperforming 91.59% of the companies in the same industry.
• Looking at the Return On Equity, with a value of 17.13%, UHS belongs to the top of the industry, outperforming 86.92% of the companies in the same industry.
• UHS has a better Return On Invested Capital (10.57%) than 86.92% of its industry peers.
• The last Return On Invested Capital (10.57%) for UHS is above the 3 year average (8.28%), which is a sign of increasing profitability.
• UHS's Profit Margin of 7.22% is amongst the best of the industry. UHS outperforms 85.98% of its industry peers.
• Looking at the Operating Margin, with a value of 10.63%, UHS belongs to the top of the industry, outperforming 85.98% of the companies in the same industry.

Exploring UHS's Health

To gauge a stock's financial health, ChartMill utilizes a Health Rating on a scale of 0 to 10. This comprehensive evaluation encompasses liquidity and solvency, both in absolute terms and in comparison to industry peers. UHS has earned a 6 out of 10:

• An Altman-Z score of 3.08 indicates that UHS is not in any danger for bankruptcy at the moment.
• Looking at the Altman-Z score, with a value of 3.08, UHS is in the better half of the industry, outperforming 67.29% of the companies in the same industry.
• UHS's Debt to FCF ratio of 4.01 is fine compared to the rest of the industry. UHS outperforms 71.96% of its industry peers.

How do we evaluate the Growth for UHS?

Every stock receives a Growth Rating from ChartMill, ranging from 0 to 10. This rating assesses various growth aspects, including historical and projected EPS and revenue growth. UHS boasts a 5 out of 10:

• The Earnings Per Share has grown by an impressive 57.73% over the past year.
• The Earnings Per Share has been growing by 10.74% on average over the past years. This is quite good.
• Looking at the last year, UHS shows a quite strong growth in Revenue. The Revenue has grown by 10.82% in the last year.

Every day, new Decent Value stocks can be found on ChartMill in our Decent Value screener.

For an up to date full fundamental analysis you can check the fundamental report of UHS

Keep in mind

This is not investing advice! The article highlights some of the observations at the time of writing, but you should always make your own analysis and invest based on your own insights.