March 05, 2026 a 07:46 am
DGX: Dividend Analysis - Quest Diagnostics Incorporated
Quest Diagnostics Incorporated demonstrates a solid commitment to shareholder value with its ongoing dividend payments. Its lengthy dividend history and manageable payout ratios suggest a sustainable and investor-friendly approach. However, the relatively modest dividend yield, at just over 1.56%, may be less attractive to income-focused investors compared to higher-yield alternatives.
📊 Overview
Quest Diagnostics operates within the healthcare sector, known for its resilience and stability. The company's current dividend yield stands at 1.56%, with a dividend per share of $3.18, supported by an impressive 23-year dividend history without any recent cuts or suspensions.
| Data Point | Value |
|---|---|
| Sector | Healthcare |
| Dividend Yield | 1.56% |
| Current Dividend per Share | $3.18 |
| Dividend History | 23 years |
| Last Cut or Suspension | None |
🗣️ Dividend History
Maintaining a consistent dividend payout is indicative of a company’s stability and management’s commitment to returning value to shareholders. A strong dividend history with 23 years of consecutive payments exemplifies this.
| Year | Dividend Per Share (USD) |
|---|---|
| 2026 | $1.66 |
| 2025 | $3.15 |
| 2024 | $2.96 |
| 2023 | $2.79 |
| 2022 | $2.60 |
📈 Dividend Growth
The growth of dividends over time reflects positively on a company's financial health and its ability to generate increasing earnings for distribution. The recent dividend growth of 6.6% over 3 years and 7.3% over 5 years indicates stable financial health.
| Time | Growth |
|---|---|
| 3 years | 6.61% |
| 5 years | 7.35% |
The average dividend growth is 7.35% over 5 years. This shows moderate but steady dividend growth.
✅ Payout Ratio
The payout ratio is critical as it denotes the proportion of earnings a company pays to its shareholders in dividends. A lower payout ratio suggests that a company has ample earnings to cover its dividends.
| Key Figure | Ratio |
|---|---|
| EPS-based | 35.58% |
| Free Cash Flow-based | 26.03% |
With an EPS-based payout ratio of 35.58% and a free cash flow-based ratio at 26.03%, Quest Diagnostics maintains a safe buffer, indicating a healthy dividend coverage.
💸 Cashflow & Capital Efficiency
Cash flow and capital efficiency metrics provide insights into how well a company utilizes its resources to generate earnings. These metrics help evaluate the company's operational efficiency and its potential for sustainable growth.
| Metric | 2025 | 2024 | 2023 |
|---|---|---|---|
| Free Cash Flow Yield | 7.06% | 5.43% | 5.59% |
| Earnings Yield | 5.15% | 5.20% | 5.53% |
| CAPEX to Operating Cash Flow | 27.94% | 31.86% | 32.08% |
| Stock-based Compensation to Revenue | 0.80% | 0.89% | 0.83% |
| Free Cash Flow / Operating Cash Flow Ratio | 72.06% | 68.14% | 68.92% |
Quest Diagnostics shows promising cash flow consistency and efficient capital allocation, enhancing its ability to sustain dividend payments and invest in growth opportunities.
🧾 Balance Sheet & Leverage Analysis
An analysis of leverage and liquidity is essential to assess a firm's financial stability and risk profile. It provides an understanding of debt levels relative to assets and equity.
| Metric | 2025 | 2024 | 2023 |
|---|---|---|---|
| Debt-to-Equity | 0.97 | 1.05 | 0.87 |
| Debt-to-Assets | 0.43 | 0.44 | 0.39 |
| Debt-to-Capital | 0.49 | 0.51 | 0.47 |
| Net Debt to EBITDA | 3.20 | 3.45 | 2.78 |
| Current Ratio | 1.04 | 1.10 | 1.31 |
| Quick Ratio | 0.96 | 1.02 | 1.20 |
| Financial Leverage | 2.26 | 2.38 | 2.22 |
Quest Diagnostics maintains a stable financial structure with reasonable leverage ratios, enhancing its ability to meet long-term financial obligations.
📊 Fundamental Strength & Profitability
Fundamental strength and profitability metrics reveal a company's capability to generate profits efficiently. They reflect operational success and potential for sustained earnings growth.
| Metric | 2025 | 2024 | 2023 |
|---|---|---|---|
| Return on Equity | 13.84% | 12.85% | 13.54% |
| Return on Assets | 6.11% | 5.39% | 6.09% |
| Margins - Net | 8.99% | 8.82% | 9.23% |
| Margins - EBIT | 14.72% | 14.19% | 13.98% |
| Margins - EBITDA | 19.88% | 19.19% | 18.72% |
| Margins - Gross | 31.93% | 32.86% | 33.17% |
| R&D to Revenue | 0% | 0% | 0% |
Quest Diagnostics boasts consistent profitability metrics across years, indicating its effective management and ability to capitalize on its assets.
📉 Price Development
🔍 Dividend Scoring System
| Criteria | Score | |
|---|---|---|
| Dividend Yield | 2 | |
| Dividend Stability | 5 | |
| Dividend Growth | 4 | |
| Payout Ratio | 5 | |
| Financial Stability | 4 | |
| Dividend Continuity | 5 | |
| Cashflow Coverage | 4 | |
| Balance Sheet Quality | 4 |
Total Score: 33/40
🌟 Rating
Quest Diagnostics offers a strong dividend profile with consistent and reliable growth. While the yield itself might not be the most attractive, the stability and growth potential make it a worthwhile consideration for long-term investors seeking reliable income with modest growth prospects. The current financial health and payout ratios suggest resilience, making it a favorable choice in the healthcare sector for dividend investors.