Company Overview
Universal Health Services, Inc. owns and operates a network of acute care hospitals, alongside outpatient and behavioral health care facilities located throughout the United States. The corporation functions within the Healthcare sector, specifically categorized under the Medical Care Facilities industry, which implies a focus on direct patient care and operational management of medical infrastructure. The company demonstrates significant scale with a market capitalization of $11.24B, generating annual revenue of $17.36B, and employing a workforce of 78,400 individuals. These valuation and revenue figures indicate that UHS operates as a substantial market participant with a diversified asset base, positioning it as a major entity within the specialized healthcare service landscape.
Financial Health
The company reported revenue of $17.36B and net income of $1.49B for the trailing twelve months, while EBITDA stands at $2.61B. The substantial gap between revenue and net income reveals a significant cost structure where operating expenses, including labor and medical supplies, consume the majority of gross receipts before arriving at the bottom line. Free cash flow is reported at $565.25M, which indicates the company possesses moderate financial flexibility to fund operations or capital expenditures without relying solely on external financing. Gross margin is 43.9%, operating margin is 11.5%, and profit margin is 8.6%, suggesting that while the business model generates strong gross revenue, operational costs and taxes materially reduce the final profitability available to shareholders. On the balance sheet, cash holdings of $137.80M are significantly lower than total debt of $5.17B, and the debt-to-equity ratio is 69.73, indicating a leveraged financial structure that relies heavily on borrowed capital rather than equity financing. The current ratio is 1.05, which suggests that the company maintains a tight liquidity position where current assets barely cover current liabilities, reflecting a conservative approach to short-term solvency. Return on equity is 21.3% and return on assets is 8.3%, metrics that reveal management is highly effective at generating returns on shareholder capital and utilizing the total asset base to produce earnings relative to the industry average.
Valuation Assessment
The trailing twelve-month P/E ratio is 7.97, while the forward P/E is 7.20, implying that the market expects earnings growth that will lower the valuation multiple over the next year. The price-to-book ratio is 1.54, which indicates that the stock trades at a moderate premium over its book value, reflecting the intangible nature of healthcare assets and brand value not captured on the balance sheet. Alternative valuation metrics show a price-to-sales ratio of 0.65 and an EV/EBITDA of 6.28, suggesting the company is valued at a discount relative to sales and enterprise earnings, which can be attractive for value-oriented analysis. The 52-week high is $246.33 and the 52-week low is $152.33, meaning the current price sits somewhere within this range depending on the specific day's trading, though the exact percentage distance requires real-time price data not provided in the facts. The beta is 1.26, which means the stock exhibits higher price volatility than the broader market, moving 26% more aggressively than the benchmark index during periods of market fluctuation.
Growth & Income
Revenue growth year-over-year is 9.1%, while earnings growth year-over-year is 42.7%, indicating that earnings are expanding significantly faster than revenue, which implies improved operational efficiency or margin expansion rather than simple volume growth. As a dividend payer, the company offers a dividend yield of 0.4% with a payout ratio of 3.5%, a low payout level that is highly sustainable given the robust earnings growth and allows management to retain capital for reinvestment. The low payout ratio confirms that the company prioritizes retaining earnings to fuel growth initiatives rather than distributing a high percentage of profits to shareholders. The overall growth and income profile is characterized by accelerating earnings expansion supported by a minimal but sustainable dividend policy.
Peer Comparison
Universal Health Services, Inc. (UHS) operates in the Medical Care Facilities industry. Here is how it compares to its closest peers by market capitalization:
The Medical Care Facilities industry average P/E ratio is 28.6x. Universal Health Services, Inc. trades at a P/E of 6.5.