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, July 25, 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.

CVS Health Corp’s Value Grade

Value Grade:

CVS Health Corporation is a health solutions company. The Company operates in four segments: Health Care Benefits, Health Services, Pharmacy & Consumer Wellness, and Corporate/Other. Its Health Care Benefits segment offer a range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental and behavioral health plans, medical management capabilities, Medicare Advantage and Medicare supplement plans, and Medicaid health care management services. Its Health Services segment provides a full range of pharmacy benefit management solutions, delivers health care services in its medical clinics, virtually, and in the home, and offers provider enablement solutions. The Pharmacy & Consumer Wellness segment dispenses prescriptions in its retail pharmacies and through its infusion operations, provides ancillary pharmacy services, including pharmacy patient care programs, diagnostic testing and vaccination administration.

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.

CVS Health Corp has a Value Score of 91, which is considered to be undervalued.

When you look at CVS Health Corp’s price-to-sales ratio at 0.20 compared to the industry median at 1.25, this company has a lower price relative to revenue compared to its peers. This could make CVS Health Corp’s stock more attractive for value investors.

CVS Health Corp’s price-earnings ratio is 10.29 compared to the industry median at 22.94. This means it has a lower share price relative to earnings compared to its peers. This could make CVS Health Corp more attractive for value investors.

Now, let’s assess CVS Health Corp’s EV/EBITDA ratio, also known as enterprise multiple. At 8.6, when compared to the industry median of 13.4, 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. CVS Health Corp’s shareholder yield is higher 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.

As one of the most common value metrics, the price-to-book ratio evaluates a company’s current market price relative to its book value. CVS Health Corp’s price-to-book ratio is lower than its industry median ratio of 2.21. This could make CVS Health Corp more attractive to investors looking for a new addition to their portfolio.

Lastly, let’s take a look at CVS Health Corp’s price-to-free-cash-flow ratio (P/FCF), which can indicate a company’s market value relative to its operating cash flow. CVS Health Corp’s price-to-free-cash-flow ratio is lower than its industry median ratio of 25.60. This could make CVS Health Corp more attractive because the lower P/FCF ratio indicates that CVS Health Corp is undervalued. The P/FCF ratio metric can also be viewed over a long-term time frame to see if the company's cash flow to share price value is generally improving or worsening.

DocGo Inc’s Value Grade

Value Grade:

DocGo Inc. is a healthcare transportation and mobile services company. The Company uses dispatch and communication technology to help provide healthcare transportation and mobile services in-person medical treatment directly to patients in the comfort of their homes, workplaces, and other non-traditional locations, in metropolitan cities in the United States and the United Kingdom. Its segments include Mobile Health Services, Transportation Services and Corporate. Mobile Health Services include a wide variety of healthcare services performed at homes, offices and other locations and event services such as on-site healthcare support at sporting events and concerts. Transportation Services encompass both emergency response and non-emergency transport services. Non-emergency transport services include ambulance transports and wheelchair transports. Corporate segment represents shared services and personnel that support both the Transportation Services and Mobile Health Services segments.

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.

DocGo Inc has a Value Score of 70, which is considered to be undervalued.

DocGo Inc’s price-earnings ratio is 16.5 compared to the industry median at 22.9. This means that it has a lower price relative to its earnings compared to its peers. This makes DocGo Inc more attractive for value investors.

DocGo Inc’s price-to-book ratio is higher than its peers. This could make DocGo Inc less attractive for value investors when compared to the industry median at 2.21.

You can read more about DocGo 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.

OPKO Health Inc’s Value Grade

Value Grade:

OPKO Health, Inc. is a multinational biopharmaceutical and diagnostics company. The Company's diagnostics segment consists of the clinical laboratory operations of BioReference Health, LLC (BioReference), its point-of-care operations. Its pharmaceutical segment consists of the pharmaceutical operations in Chile, Mexico, Ireland, Israel, Spain, Ecuador, France, the United States, and its pharmaceutical research and development operations. Through BioReference, it operates specialized laboratory divisions, such as GenPath (Urology), GenPath (Oncology), and GenPath (Women's Health). It has two commercial stage pharmaceutical products and several pharmaceutical compounds and technologies in various stages of research and development for a range of indications and conditions, including Rayaldee, Rayaldee, Oxyntomodulin, Biologics, NGENLA Somatrogon, and Factor VIIa-CTP. It develops and manufactures specialty active pharmaceutical ingredients (APIs) through FineTech Pharmaceutical, Ltd.

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.

OPKO Health Inc has a Value Score of 91, which is considered to be undervalued.

OPKO Health Inc’s price-to-book ratio is higher than its peers. This could make OPKO Health Inc less attractive for value investors when compared to the industry median at 2.21.

You can read more about OPKO Health 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.

Teladoc Health Inc’s Value Grade

Value Grade:

Teladoc Health, Inc. provides virtual healthcare services. The Company operates through two segments: Teladoc Health Integrated Care (Integrated Care) and BetterHelp. The Integrated Care segment includes a suite of global virtual medical services including general medical, expert medical services, specialty medical, chronic condition management, mental health, and enabling technologies and enterprise telehealth solutions for hospitals and health systems. Services in this segment are distributed primarily on a business-to-business (B2B) basis. The BetterHelp segment primarily consists of its direct-to-consumer (D2C) mental health platform. The online counseling and therapy services are provided via its network of over 40,000 licensed clinicians leveraging its platform for Web, mobile app, phone, and text-based interactions. Its Teladoc Health family of brands, including Teladoc and BetterHelp, deliver access to advice and resolution for an array of healthcare needs.

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.

Teladoc Health Inc has a Value Score of 66, which is considered to be undervalued.

Teladoc Health Inc’s price-to-book ratio is higher than its peers. This could make Teladoc Health Inc less attractive for value investors when compared to the industry median at 2.21.

You can read more about Teladoc Health 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 5.6 compared to the industry median at 22.9. 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 2.21.

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 15.8 compared to the industry median at 22.9. 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 2.21.

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.

• CVS Health Corp stock has a Value Grade of A.
• DocGo Inc stock has a Value Grade of B.
• OPKO Health Inc stock has a Value Grade of A.
• Teladoc Health 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, July 25
• 4 Undervalued Healthcare Facilities & Services Stocks for Wednesday, July 24
• What You Need to Know About Amedisys Inc's Q2 Earnings
• What You Need to Know About Chemed Corp's Q2 Earnings

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