Based on key financial metrics such as the price-to-sales ratio, shareholder yield and the price-earnings ratio, the following 6 stocks made the list for top value stocks in the Healthcare Facilities & Services industry. Those looking for value stocks to add to their portfolio may want to use this list as a starting point for further investment research.

Why Focus on Undervalued Healthcare Facilities & Services Stocks?

Value investors seek to buy stocks at a discount to their intrinsic value. Long-term returns show that such strategies are advantageous. Value stocks, as a group, tend to outperform growth stocks over extended periods of time. Typically, value investors perform financial analysis of numerous metrics, don’t follow the herd and are long-term investors.

AAII’s A+ Investor Value Grade is derived from a stock’s Value Score. The Value Score is the percentile rank of the average of the percentile ranks of the price-to-sales ratio, price-earnings ratio, enterprise-value-to-EBITDA (EV/EBITDA) ratio, shareholder yield, price-to-book-value ratio and price-to-free-cash-flow ratio. The score is variable, meaning it can consider all six ratios or, should any of the six ratios not be valid, the remaining ratios that are valid. To be assigned a Value Score, stocks must have a valid (non-null) ratio and corresponding ranking for at least two of the six valuation ratios.

What Goes Into AAII’s Value Grade?

Stock evaluation requires access to huge amounts of data as well as the knowledge and time to sift through it all, make sense of financial ratios, read income statements and analyze recent stock movement. AAII created A+ Investor, a robust data suite that condenses data research in an actionable and customizable way suitable for investors of all knowledge levels, to help investors with that task.

AAII’s proprietary stock grades come with A+ Investor. These offer intuitive A–F grades for more than just value. It is possible for a stock to appear cheap based on one valuation metric but appear expensive on another. It is also possible for one valuation ratio to be associated with outperforming stocks during certain periods of time but not others. Some stocks may even have null values for certain metrics like the price-earnings ratio or the price-to-book ratio but not others. An example of this would be a company with losses instead of profits or a negative book value because of heavy borrowing. Negative earnings or book value result in non-meaningful ratios that are left blank or null.

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6 Undervalued Healthcare Facilities & Services Stocks

Of course, there are countless value stocks that are worth mentioning, but this is a concise list of the top 6 undervalued stocks in the Healthcare Facilities & Services industry for Thursday, May 16, 2024. Let’s take a closer look at their individual scores to see how they measure up against each other and the Healthcare Facilities & Services industry median.

The Value Grade is assigned based on how each stock’s composite valuation compares to all other stocks.

The process for assigning grades starts with each variable for a given stock. The percentile rankings for all valid ratios that a stock has are calculated. So, for instance, a stock could have a price-to-book ranking in the 43rd percentile, a price-earnings ranking in the 67th percentile, a price-to-sales ranking in the 23rd percentile, etc. Then, those rankings are averaged for each stock. (A minimum of two valid variables are required, though all six will be used if available.)

Once the average of the individual variables is calculated, that average is ranked against all stocks. Put another way, each stock’s composite valuation is compared to all other stocks. These ranks are then sorted into quintiles from the cheapest 20% (a grade of A) to the most expensive 20% (a grade of F).

As always, we recommend that you conduct proper due diligence and research before investing in any security. We also suggest that investors utilize numerous grades, not just value, when it comes to deciding whether a company is a good fit for their allocation needs.

Aveanna Healthcare Holdings Inc’s Value Grade

Value Grade:

Aveanna Healthcare Holdings Inc. is a provider of diversified home care platform. The Company provides a range of specialized clinical care and non-clinical services to address the complex needs of each patient it serves across the full range of patient populations: newborns, children, adults and seniors. It has three segments: Private Duty Services (PDS), Home Health & Hospice (HHH), and Medical Solutions (MS). PDS segment includes private duty nursing (PDN) services, as well as pediatric therapy services. HHH segment provides home health, hospice and specialty program services to predominately elderly populations seeking compassionate care and assistance with activities of daily living in the home. Medical Solutions segment provide needed supplies to patients requiring enteral nutrition services or respiratory care. Enteral nutrition (tube or intravenous (IV)) feeding, is a way of delivering nutrition directly to the stomach or small intestine on an as-needed basis.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Aveanna Healthcare Holdings Inc has a Value Score of 71, which is considered to be undervalued.

When you look at Aveanna Healthcare Holdings Inc’s price-to-sales ratio at 0.27 compared to the industry median at 1.30, this company has a lower price relative to revenue compared to its peers. This could make Aveanna Healthcare Holdings Inc’s stock more attractive for value investors.

Now, let’s assess Aveanna Healthcare Holdings Inc’s EV/EBITDA ratio, also known as enterprise multiple. At 8.0, when compared to the industry median of 12.9, the company may be considered undervalued in relation to its peers. Value investors could use the enterprise multiple to identify stocks that are considered overvalued or undervalued relative to their industry.

Shareholder yield is the sum of a stock’s dividend yield (paid over previous 12 months minus special dividends) and the percentage of net share buybacks over the previous 12 months. Aveanna Healthcare Holdings Inc’s shareholder yield is lower than its industry median ratio of (1.64%). Value investors may look for an attractive shareholder yield because it can be a powerful tool for identifying if the company has a good management team.

Burning Rock Biotech Ltd (ADR)’s Value Grade

Value Grade:

Burning Rock Biotech Ltd is a holding company mainly engaged in the next generation sequencing (NGS) based cancer therapy selection. The Company operates three segments. Central Laboratory Business segment is engaged in the sales of cancer therapy selection test to individual patients. In-Hospital Business segment is engaged in the sales of reagent kits and the provision of the facilitation services for the sale of laboratory equipment to hospitals. Pharma Research and Development Services segment provide services to companies primarily in relation to the development of targeted therapies and immunotherapies for various types of cancer, and to hospitals for their studies on cancer diagnosis and treatment. Its products include OncoScreen Plus and LungPlasma. Its NGS-based cancer therapy selection tests applicable to a broad range of cancer types, including lung cancer, prostate cancer, breast cancer and others. The Company mainly conducts its businesses in the China market.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Burning Rock Biotech Ltd (ADR) has a Value Score of 98, which is considered to be undervalued.

Burning Rock Biotech Ltd (ADR)’s price-to-book ratio is higher than its peers. This could make Burning Rock Biotech Ltd (ADR) less attractive for value investors when compared to the industry median at 2.43.

You can read more about Burning Rock Biotech Ltd (ADR)’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

DLH Holdings Corp’s Value Grade

Value Grade:

DLH Holdings Corp. is a provider of science research and development, systems engineering and integration, and digital transformation and cyber security solutions to federal agencies. The Company is focused on improved deployment of health and defense initiatives for multiple agencies within the federal government, including the Department of Health and Human Services and Department of Defense. Its digital transformation and cyber security solutions include tools, such as artificial intelligence and machine learning, cloud enablement, cybersecurity ecosystem, big data analytics, and modeling and simulation. The Company's science research and development solutions include data analytics, testing and evaluation, clinical trials research services, and epidemiology studies. Its systems engineering and integration solutions include system modernization, enterprise-edge information technology (IT) management, health IT systems, performance-based logistics and robotics and unmanned systems.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

DLH Holdings Corp has a Value Score of 61, which is considered to be undervalued.

DLH Holdings Corp’s price-earnings ratio is 54.4 compared to the industry median at 27.1. This means that it has a higher price relative to its earnings compared to its peers. This makes DLH Holdings Corp less attractive for value investors.

DLH Holdings Corp’s price-to-book ratio is higher than its peers. This could make DLH Holdings Corp less attractive for value investors when compared to the industry median at 2.43.

You can read more about DLH Holdings Corp’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

HCA Healthcare Inc’s Value Grade

Value Grade:

HCA Healthcare, Inc. is a health care services company. The Company owns, manages or operates hospitals, freestanding surgery centers, freestanding emergency care facilities, urgent care facilities, walk-in clinics, diagnostic and imaging centers, radiation and oncology therapy centers, comprehensive rehabilitation and physical therapy centers, physician practices, home health, hospice, outpatient physical therapy home and community-based services providers, and various other facilities. It also operates outpatient health care facilities, which include freestanding ambulatory surgery centers (ASCs), freestanding emergency care facilities, urgent care facilities, walk-in clinics, diagnostic and imaging centers, comprehensive rehabilitation and physical therapy centers, radiation and oncology therapy centers, physician practices and other facilities. It operates about 186 hospitals, comprised of 178 general, acute care hospitals, six behavioral hospitals and two rehabilitation hospitals.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

HCA Healthcare Inc has a Value Score of 66, which is considered to be undervalued.

HCA Healthcare Inc’s price-earnings ratio is 16.3 compared to the industry median at 27.1. This means that it has a lower price relative to its earnings compared to its peers. This makes HCA Healthcare Inc more attractive for value investors.

You can read more about HCA Healthcare Inc’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Tenet Healthcare Corp’s Value Grade

Value Grade:

Tenet Healthcare Corporation is a diversified healthcare services company. The Company’s care delivery network includes USPI Holding Company, Inc. (USPI), which operates or has ownership interests in ambulatory surgery centers and surgical hospitals. The Company also operates acute care and specialty hospitals, as well as other outpatient facilities, including surgical hospitals, and ambulatory surgery centers (ASC), among others. The Company operates through two segments: Hospital Operations and Services, and Ambulatory Care. The Hospital Operations and Services segment, which is comprised of acute care and specialty hospitals, a network of employed physicians and ancillary outpatient facilities, as well as the revenue cycle management and value-based care services that the Company provide to hospitals, health systems, physician practices, employers, and other clients. The Ambulatory Care segment, which is comprised of USPI’s ASCs and surgical hospitals.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Tenet Healthcare Corp has a Value Score of 83, which is considered to be undervalued.

Tenet Healthcare Corp’s price-earnings ratio is 5.1 compared to the industry median at 27.1. This means that it has a lower price relative to its earnings compared to its peers. This makes Tenet Healthcare Corp more attractive for value investors.

Tenet Healthcare Corp’s price-to-book ratio is lower than its peers. This could make Tenet Healthcare Corp more attractive for value investors when compared to the industry median at 2.43.

You can read more about Tenet Healthcare Corp’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Universal Health Services, Inc.’s Value Grade

Value Grade:

Universal Health Services, Inc. is a holding company. It operates through its subsidiaries, including its management company. It is engaged in owning and operating acute care hospitals and outpatient facilities, and behavioral healthcare facilities. Its segments include acute care hospital services, behavioral health care services, and Other. It owns and operates approximately 360 inpatient facilities and 48 outpatient and other facilities located in 39 states, Washington, D.C., the United Kingdom, and Puerto Rico. It provides services, which include general and specialty surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic care, coronary care, pediatric services, pharmacy services and/or behavioral health services. It also provides capital resources, as well as a variety of management services to its facilities, including information services, finance and control systems, facilities planning, physician recruitment services, and public relations.

Stocks with a Value Score from 81 to 100 are considered deep value, those with a score between 61 and 80 are value and so on.

Universal Health Services, Inc. has a Value Score of 64, which is considered to be undervalued.

Universal Health Services, Inc.’s price-earnings ratio is 15.5 compared to the industry median at 27.1. This means that it has a lower price relative to its earnings compared to its peers. This makes Universal Health Services, Inc. more attractive for value investors.

Universal Health Services, Inc.’s price-to-book ratio is higher than its peers. This could make Universal Health Services, Inc. less attractive for value investors when compared to the industry median at 2.43.

You can read more about Universal Health Services, Inc.’s key financial metrics like shareholder yield, price-to-free-cash-flow and EV/EBITDA ratio, or learn more about its Momentum and Growth Grades, by subscribing to A+ Investor.

Other Healthcare Facilities & Services Stock Grades

Value is just one of the five Stock Grades included in our A+ Investor service. AAII members can see the top-graded stocks—those with grades of A or B for value, growth, momentum, earnings estimate revisions and quality—on the A+ Stock Grades Screener.

Also, if you want full access to all of AAII’s premium services, you can subscribe to one convenient bundled plan called AAII Platinum where you can try out A+ Investor, AAII Dividend Investing, the Stock Superstars Report, Growth Investing and VMQ Stocks. With the other premium services, you can dive deep into additional metrics, portfolios, commentary and information about Healthcare Facilities & Services stocks as well as other industrys.

Choosing Which of the 6 Best Healthcare Facilities & Services Stocks Is Right for You

Choosing which value stocks to invest in will ultimately depend on your individual goals and allocation; however, comparing similar value stocks in the same industry can help you analyze which might be better investments for you in the long run. So, let’s take a look at the Value Grade for all of our stocks.

• Aveanna Healthcare Holdings Inc stock has a Value Grade of B.
• Burning Rock Biotech Ltd (ADR) stock has a Value Grade of A.
• DLH Holdings Corp stock has a Value Grade of B.
• HCA Healthcare Inc stock has a Value Grade of B.
• Tenet Healthcare Corp stock has a Value Grade of A.
• Universal Health Services, Inc. stock has a Value Grade of B.

Now that you have a bit more background about each of the 6 undervalued stocks in the Healthcare Facilities & Services industry as well as their overall grades, it’s time for you to conduct additional research to see if these could fit your portfolio needs based on your goals and risk tolerance. AAII can help you figure out both and identify which investments align with what works best for you.

We do so through a program of education that teaches you to invest for yourself and become an effective manager of your own wealth—no more relying on others for your financial independence. You can rely on AAII for timeless articles on financial planning and stock-picking, unbiased research and actionable analysis that makes you a better investor.

A+ Investor adds to that qualitative teaching by giving you a powerful data suite that helps you whittle down investment decisions to find stocks, exchange-traded funds (ETFs) or mutual funds that meet your needs.

Additional Resources About Healthcare Facilities & Services Stocks

Want to learn more about Healthcare Facilities & Services stocks to see if they could be the right investment for you? Check out some additional resources and articles to help you on your financial journey.

• 6 Undervalued Healthcare Facilities & Services Stocks for Thursday, May 16
• 7 Undervalued Healthcare Facilities & Services Stocks for Wednesday, May 15
• Why Enhabit Inc’s (EHAB) Stock Is Down 4.20%
• Why Solventum Corp’s (SOLV) Stock Is Down 4.09%

AAII Disclaimer

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