Universal Health Services Inc (NYSE: UHS)

Sector: Healthcare Industry: Medical Care Facilities CIK: 0000352915
Market Cap 14.64 Bn
P/B 2.04
P/E 10.65
P/S 0.86
ROIC (Qtr) 12.18
Div Yield % 0.44
Rev 1y % (Qtr) 13.43
Total Debt (Qtr) 5.11 Bn
Debt/Equity (Qtr) 0.71

About

Universal Health Services (UHS) is a prominent player in the healthcare industry, with its stock symbol UHS. The company's operations span across the United States, the United Kingdom, and Puerto Rico, encompassing acute care hospitals, outpatient facilities, and behavioral health care facilities. UHS offers a wide array of services, including general and specialty surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic care, coronary care, pediatric services, pharmacy services, and behavioral health services....

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Price action

Investment thesis

Bull case

  • Operating cash flow of 1.95B provides exceptional 77.49x coverage of minority interest expenses 25.14M, showing strong core operations.
  • Operating cash flow of 1.95B provides exceptional 12.69x coverage of interest expenses 153.57M, showing strong debt service capability.
  • Operating cash flow of 1.95B provides strong 20.04x coverage of stock compensation 97.21M, indicating sustainable incentive practices.
  • Robust tangible asset base of 11.35B provides 114.96x coverage of working capital 98.77M, indicating strong operational backing.
  • Tangible assets of 11.35B provide robust 856.82x coverage of other current liabilities 13.25M, indicating strong asset backing.

Bear case

  • Operating cash flow of 1.95B barely covers its investment activities of (1.05B), with a coverage ratio of -1.85, indicating heavy reliance on external financing for growth which may not be sustainable in a tighter credit environment.
  • Operating cash flow of 1.95B provides thin coverage of dividend payments of (51.95M) with a -37.50 ratio, suggesting potential dividend sustainability issues if operational performance deteriorates.
  • Cash reserves of 112.89M provide limited coverage of acquisition spending of (55.27M), which is -2.04x, suggesting aggressive expansion might strain liquidity if market conditions deteriorate.
  • High receivables of 2.59B relative to inventory of 226.66M (11.41 ratio) suggests aggressive credit terms or collection difficulties, potentially masking revenue quality issues.
  • Cash position of 112.89M provides weak coverage of payables of 2.33B, which is 0.05x, indicating potential working capital stress and supplier relationship risks.

Peer comparison

Companies in the Medical Care Facilities
S.No. Ticker Company Market Cap P/E P/S Total Debt (Qtr)
1 HCA HCA Healthcare, Inc. 114.88 Bn 18.11 1.54 46.35 Bn
2 THC Tenet Healthcare Corp 18.07 Bn 13.34 0.87 13.19 Bn
3 UHS Universal Health Services Inc 14.64 Bn 10.65 0.86 5.11 Bn
4 FMS Fresenius Medical Care AG 14.10 Bn 16.69 0.61 14.98 Bn
5 EHC Encompass Health Corp 12.55 Bn 19.95 2.17 2.66 Bn
6 ENSG Ensign Group, Inc 10.08 Bn 30.72 2.09 2.16 Bn
7 DVA Davita Inc. 8.90 Bn 11.53 0.67 12.78 Bn
8 CHE Chemed Corp 6.38 Bn 22.87 2.52 0.14 Bn

Industry comparisons

Current Valuation Value Ind Avg Percentile
EV to Assets EV to Assets 1.27 1.26
EV to Cash from Ops. EV/CFO 10.02 12.78
EV to Debt EV to Debt 3.82 12.10
EV to EBIT EV/EBIT 9.97 10.74
EV to EBITDA EV/EBITDA 7.65 16.04
EV to Free Cash Flow [EV/FCF] EV/FCF 20.56 18.02
EV to Market Cap EV to Market Cap 1.33 432.64
EV to Revenue EV/Rev 1.15 2.77
Price to Book Value [P/B] P/B 2.04 -1.92
Price to Earnings [P/E] P/E 10.65 5.13
Dividend Metrics Value Ind Avg Percentile
Dividend Coverage Ratio Div Coverage (Qtr) 26.47 0.10
Dividend Payout Ratio % Div Payout % (Qtr) 3.80 -13.44
Dividend per Basic Share Div per Share (Qtr) 0.80 0.27
FCF Dividend Payout Ratio % FCF Div Payout % (Qtr) 5.31 5.42
Interest Coverage Int. cover (Qtr) 12.75 -97.94
Growth Metrics Value Ind Avg Percentile
Capex Growth (1y) % Capex 1y % (Qtr) -10.43 -114.65
Cash and Equivalents Growth (1y) % Cash & Equiv 1y % (Qtr) 6.43 65.22
Dividend Growth (1y) % Div 1y % (Qtr) 0.00 0.97
EBIAT Growth (1y) % EBIAT 1y % (Qtr) 26.32 -46.98
EBITDA Growth (1y) % EBITDA 1y % (Qtr) 20.12 75.97
EBIT Growth (1y) % EBIT 1y % (Qtr) 28.68 -61.19
EBT Growth (1y) % EBT 1y % (Qtr) 36.54 -115.48
EPS Growth (1y) % EPS 1y % (Qtr) 39.59 -24.32
FCF Growth (1y) % FCF 1y % (Qtr) -0.76 309.51
Gross Profit Growth (1y) % Gross Profit 1y % (Qtr) 15.41 17.88
Liquidity Ratios Value Ind Avg Percentile
Asset Utilization Ratio Asset Util Ratio (Qtr) 1.11 1.04
Cash Payout Ratio Cash Payout (Qtr) 0.02 0.04
Cash Ratio Cash Ratio (Qtr) 0.04 0.39
Current Ratio Curr Ratio (Qtr) 1.03 1.39
Debt to Equity Ratio Debt/Equity (Qtr) 0.71 -13.19
Interest Cover Ratio Int Coverage (Qtr) 12.75 -97.94
Times Interest Earned Times Interest Earned (Qtr) 12.75 -97.94
Profitability Value Ind Avg Percentile
EBITDA Margin % EBITDA Margin % (Qtr) 15.10 -95.81
EBIT Margin % EBIT Margin % (Qtr) 11.52 -94.97
EBT Margin % EBT Margin % (Qtr) 10.62 -105.60
Gross Margin % Gross Margin % (Qtr) 42.70 23.31
Net Profit Margin % Net Margin % (Qtr) 8.10 -106.14