Definitive Analysis
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Universal Health Services, Inc. (UHS)

Company Dividend Discount ModelIndustry: Medical - Care FacilitiesSector: Healthcare

Valuation Snapshot

Stable Growth$344.35 - $671.55$474.04
Multi-Stage$307.40 - $336.60$321.73
Blended Fair Value$397.89
Current Price$204.44
Upside94.62%
DecisionBuy

Dividend History & Growth Metrics (10Y)

Metric5Y CAGR10Y CAGR2024202320222021202020192018201720162015
DPS0.13%6.04%0.810.840.891.000.260.810.570.580.590.60
YoY Growth---3.85%-5.08%-11.30%279.94%-67.28%41.94%-2.27%-1.71%-1.66%33.26%
Dividend Yield--0.43%0.48%0.70%0.69%0.20%0.81%0.42%0.49%0.47%0.48%

Stable Growth Model (Adjusted)

(USD in Millions except Per Share Data)
Net Income To Common (M)1,375.25
(-) Cash Dividends Paid (M)78.38
(=) Cash Retained (M)1,296.87
MetricLOWBASEHIGH
Required Retention Ratio20.0%12.5%7.5%
(=) Cash Required (M)275.05171.91103.14
Cash Retained (M)1,296.871,296.871,296.87
(-) Cash Required (M)-275.05-171.91-103.14
(=) Excess Retained (M)1,021.821,124.971,193.73
(/) Shares Outstanding (M)65.7765.7765.77
(=) Excess Retained per Share15.5417.1018.15
LTM Dividend per Share1.191.191.19
(+) Excess Retained per Share15.5417.1018.15
(=) Adjusted Dividend16.7318.3019.34
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate4.04%5.04%6.04%
Fair Value$344.35$474.04$671.55
Upside / Downside68.43%131.87%228.48%

Multi-Stage Model: Projections

(USD in Millions)
MetricTTMDec-27Dec-28Dec-29Dec-30Dec-31Terminal
Net Income (M)1,375.251,444.621,517.481,594.021,674.431,758.881,811.65
Payout Ratio5.70%22.56%39.42%56.28%73.14%90.00%92.50%
Projected Dividends (M)78.38325.90598.19897.111,224.671,582.991,675.78

Multi-Stage Valuation

MetricLOWBASEHIGH
WACC / Discount Rate9.10%9.10%9.10%
Growth Rate4.04%5.04%6.04%
Year 1 PV (M)295.88298.72301.56
Year 2 PV (M)493.05502.58512.19
Year 3 PV (M)671.33690.87710.79
Year 4 PV (M)832.02864.48897.87
Year 5 PV (M)976.391,024.221,073.91
PV of Terminal Value (M)16,950.1417,780.5218,643.12
Equity Value (M)20,218.8121,161.3822,139.45
Shares Outstanding (M)65.7765.7765.77
Fair Value$307.40$321.73$336.60
Upside / Downside50.36%57.37%64.65%

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