August 24, 2023
Top 10 Stock Universal Health Services Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Universal Health Services – Top 10 Stock in Dow Jones U.S. Health Care Providers Index
Universal Health Services is listed as a top 10 stock on August 24, 2023 in the market index D.J. US Health Care because of its high performance in at least one of the Obermatt investment strategies. As three out of four consolidated Obermatt Ranks exhibit excellent performance, it is a solid investment from a financial fact perspective where only investor sentiment is a reason for caution. Based on the Obermatt 360° View of 70 (high 70% performer), Obermatt assesses an overall buy recommendation for Universal Health Services on August 24, 2023.
Snapshot: Obermatt Ranks
| Country | USA |
| Industry | Health Care Facilities |
| Index | Customer Focus US, D.J. US Health Care, S&P 500 |
| Size class | XX-Large |
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Universal Health Services Buy
| 360 METRICS | August 24, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 88 |
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| GROWTH | ||||||||
| GROWTH | 51 |
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| SAFETY | ||||||||
| SAFETY | 64 |
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| SENTIMENT | ||||||||
| SENTIMENT | 33 |
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| 360° VIEW | ||||||||
| 360° VIEW | 70 |
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ANALYSIS: With an Obermatt 360° View of 70 (better than 70% compared with alternatives), overall professional sentiment and financial characteristics for the stock Universal Health Services are above average. The 360° View is based on consolidating four consolidated indicators, with three out of four indicators above average for Universal Health Services. The consolidated Value Rank has an attractive rank of 88, which means that the share price of Universal Health Services is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 88% of alternative stocks in the same industry. The consolidated Growth Rank has a good rank of 51, which means that the company experiences above-average growth momentum when looking at financial metrics such as revenue, profit, and invested capital growth, as well as stock returns. The company is also safely financed with a Safety Rank of 64. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of only 33. Professional investors are more confident in 67% other stocks. ...read more
RECOMMENDATION: With a consolidated 360° View of 70, Universal Health Services is better positioned than 70% of all alternative stock investment opportunities based on the Obermatt Method. As three out of four consolidated Obermatt Ranks exhibit excellent performance, such as good value (Value Rank of 88), above-average growth (Growth Rank of 51), and safe financing practices (Safety Rank of 64), it is a solid stock investment where the risk of paying too much for the shares is limited, and disappointments are less likely, unless information not publicly available. Only the professional market sentiment is on the riskier side (Sentiment Rank of 33), but that could also mean an overreaction to negative news in the past. Good value is sometimes an indication that the company's future is challenging. If they have been enjoying above average growth and are still a good value, this may not continue. We recommend evaluating whether the future of Universal Health Services is as challenging as the low price of the stock despite good growth and safe financing practices suggest. Since the professional community is pessimistic, you may want to reflect these negative opinions in light of what you find reasonable to expect for the future. If you believe this pessimistic view is transitory, you have a solid investment case based on current financial factors. ...read more
Sentiment Strategy: Professional Market Sentiment for Universal Health Services only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 33 (better than 33% compared with alternatives), overall professional sentiment and engagement for the stock Universal Health Services is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the metrics below and half above average for Universal Health Services. Analyst Opinions are at a rank of 19 (worse than 81% of alternative investments), which means that currently, stock research analysts tend to warn against investing in the stock of the company. But they are changing their opinions! Analyst Opinions Change has a rank of 65, which means that stock research experts are more positive in their investment recommendations in the company. In other words, they are getting more optimistic of stock investments in Universal Health Services. More encouragingly, the Professional Investors rank is 65, which means that professional investors hold more stock in this company than in 65% of alternative investment opportunities. Pros tend to favor investing in this company. But Market Pulse is on the lower side with a rank of 30, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 70% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 33 (less encouraging than 67% compared with investment alternatives), Universal Health Services has a reputation among professional investors that is below that of its competitors. The sentiment signals are mixed for Universal Health Services. While analysts and the news channels are negative, there is a change in what analysts think. Above-average institutional investors in this company support them. Sentiment signals remain mixed with analysts and news channels pessimistic, though improving, and professional investors above average. ...read more
Value Strategy: Universal Health Services Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 88 (better than 88% compared with alternatives) for 2023, Universal Health Services shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators that are all above average for Universal Health Services. Price-to-Sales is 64 which means that the stock price compared with what market professionals expect for future sales is lower than for 64% of comparable companies, indicating a good value for Universal Health Services's revenue size. The same is valid for expected Price-to-Profits, more favorable than for 79% of alternatives, and this is also true for the Price-to-Book capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 71. Compared with other companies in the same industry, dividend yields of Universal Health Services are expected to be higher than for 71% of all competitors (a Dividend Yield rank of 71). ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 88, is a buy recommendation based on Universal Health Services's stock price compared with the company's operational size and dividend yields. Since all value metrics are above the industry average, there is no objection to investing in Universal Health Services based on its detailed value metrics.
Growth Strategy: Universal Health Services Growth Momentum good
ANALYSIS: With an Obermatt Growth Rank of 51 (better than 51% compared with alternatives), Universal Health Services shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Universal Health Services. Capital Growth has a rank of 64, which means that currently professionals expect the company to grow its invested capital more than 39% of its competitors. Investors welcomed this, visible in the Stock Returns rank of 85 (above 85% of alternative investments). But Sales Growth has only a rank of 33, which means that, currently, professionals expect the company to grow less than 67% of its competitors, and Profit Growth is also low at a rank of 39. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 51, is a buy recommendation for growth and momentum investors. This is an ambiguous picture. Revenue growth and capital growth are strong, but the growth in profit, which seems good, can also be an indication that growth momentum may be negative. The fact that stock returns have been above average doesn't help much, as stock returns are less reliable in showing a company’s future growth potential. Prices may perform well for the simple reason that investors were too pessimistic in the past and are now correcting their opinions and moving the stock price to a more reasonable level. As the growth picture is mixed for Universal Health Services, investors may want to look at value and sentiment indicators for a well-rounded picture of this stock. ...read more
Safety Strategy: Universal Health Services Debt Financing Safety above-average
| SAFETY METRICS | August 24, 2023 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 36 |
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| REFINANCING | ||||||||
| REFINANCING | 54 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 61 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 64 |
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ANALYSIS: With an Obermatt Safety Rank of 64 (better than 64% compared with alternatives), the company Universal Health Services has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Universal Health Services is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Universal Health Services. Refinancing is at 54, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 54% of its competitors. Liquidity is also good at 61, meaning the company generates more profit to service its debt than 61% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 36, which means the company has an above-average debt-to-equity ratio. It has more debt than 64% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 64 (better than 64% compared with alternatives), Universal Health Services has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Universal Health Services could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. ...read more
Combined financial peformance: Universal Health Services Top Financial Performance
| COMBINED PERFORMANCE | August 24, 2023 | |||||||
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| VALUE | ||||||||
| VALUE | 88 |
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| GROWTH | ||||||||
| GROWTH | 51 |
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| SAFETY | ||||||||
| SAFETY | 61 |
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| COMBINED | ||||||||
| COMBINED | 93 |
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ANALYSIS: With an Obermatt Combined Rank of 93 (better than 93% compared with investment alternatives), Universal Health Services (Health Care Facilities, USA) shares have much better financial characteristics than comparable stocks. Shares of Universal Health Services are a good value (attractively priced) with a consolidated Value Rank of 88 (better than 88% of alternatives), show above-average growth (Growth Rank of 51), and are safely financed (Safety Rank of 64), which means low debt burdens. ...read more
RECOMMENDATION: A Combined Rank of 93, is a strong buy recommendation based on Universal Health Services's financial characteristics. As the company Universal Health Services's key financial metrics all exhibit excellent performance, such as good value (Obermatt Value Rank of 88), above-average growth (Obermatt Growth Rank of 51), and indicate that the company is safely financed (Obermatt Safety Rank of 64), it is a solid stock investment where the risk of paying too much for the share is limited, unless the company has a bleak future. Such good financial performance can indicate that the company's future might actually be challenging, as it may be difficult to maintain the good performance. If they are safely financed and have been growing above average, and are still a good value, it means that the market is keeping prices low, for a reason which may become clearer over time. We recommend evaluating the future of Universal Health Services. If you believe the company's future is market-typical or even better, this could be an argument for a share purchase. ...read more
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