Daily Stock Pick: Quest Diagnostics

This week, I'm looking for the third healthcare sector representative of six for my Ivy portfolio.

That healthcare sector includes ten industries all related to testing, diagnosing and treating what ails us. Healthcare industries are: biotechnology; diagnostics & research; drug manufacturers - major and - specialty & generic; healthcare plans; long-term care facilities; medical care; medical devices; medical distribution; medical supplies.

Today I'm reviewing large-cap diagnostics & research named Quest Diagnostics Inc. Its ticker symbol is DGX.

Quest Diagnostics is a leading independent provider of diagnostic testing, information, and services in the U.S. The company generates about 90% of its revenue through clinical testing, anatomic pathology, esoteric testing, and substance abuse testing at its national network of 2,000 patient service centers. The firm also runs a diagnostic solutions segment that provides clinical trials testing, risk assessment services, and information technology solutions.

The company also offers risk assessment services for the life insurance industry; and health information technology solutions for healthcare organizations and clinicians.

Quest Diagnostics Incorporated was founded in 1967 and is headquartered in Secaucus, New Jersey.

I use three key data points to gauge the value of any dividend equity-like Quest Diagnostics Inc:

(1) Price

(2) Dividends

(3) Returns

Besides those three, several other keys will finally unlock an equity or fund in which to invest.

Those first three primary keys, however, best tell whether a company has made, is making, and will make money.

DGX Price

Quest's price per share closed at $86.52 yesterday. A year ago its price was $103.05. Price fell  $16.53 per share last year, or over 16%.

Assuming Quest's stock trades in the range of $70 to $100 this year, Quest's recent $86.52 price could rise by  $3.48 and go to $90.00 by early-March, 2020.

DGX Dividends

Quest's most recent Quarterly dividend was $0.53 declared in November and paid Wednesday, January 30.

That quarterly dividend equates to a  $2.12 annual payout and a yield of 2.45% at yesterday's $86.52 closing price.

Gains For DGX?

Adding the $2.12 annual estimated dividend to my $3.48 Quest estimated price upside shows a $5.60 potential gross annual gain, per share, which will be reduced by costs to trade those shares.

Say we put a little over $1,000.00 today at the $86.52 recent stock price would buy us 12 Quest Diagnotics Inc shares.

A $10 broker fee paid half at purchase and half at sale costs $0.83 per share.

Subtract that $0.83 brokerage cost from the estimated $5.60 gross annual gain leaves a net gain of $4.77 X 12 shares

= $57.24  or over a 5.5% net gain on a $1038.24 investment.

Therefore, Quest Diagostics Inc whose trading ticker symbol is DGX now shows a possible net gain of 5.5% including a 2.45% dividend yield.

Twenty-one brokers cover this stock:

Five say "buy" DGX.

Four say DGX will "outperform" peers.

Eleven say "hold" on to your DGX shares.

One says DGX will "underperform" peers.

Therefore, you can look at  Quest Diagnostics Inc and see it has made money, is making money, and could throw a net gain of 5.5% including a 2.45% dividend yield. It could be more, it could be less.

The above speculation is based on past year performance. The actual results remain to be seen to determine if Quest Diagnostics Inc is worth your time and money.

Disclaimer: This article is for informational and educational purposes only and should not be construed to constitute investment advice. Nothing contained herein shall constitute a solicitation, ...

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