Is DaVita HealthCare Partners Inc (DVA) Worth a Buy?

Peer comparison

At the current price of $123.35 per share, DaVita is worth $13 billion on the market. Compared to its peers including, Fresenius and Amgen, Inc. (NASDAQ:AMGN), DaVita is the smallest company. Fresenius is trading at $34.15 per share, with a total market cap of $20.95 billion.

Amgen is considered the biggest company among the three, with a $70.64 billion market cap.

All the above-mentioned companies are quite profitable and are generating significantly high return on capital. Amgen stands out with its highest margin and return on capital. In addition, Amgen is paying the highest dividend yield at 1.7%, while the Fresenius’s dividend yield is only 0.9%. DaVita doesn’t pay any dividend yet. In terms of leverage, DaVita is the most leveraged company, with 2.2x debt/equity, while the debt/equity ratios of Fresenius and Amgen are only 0.7x and 1.3x, respectively.

Among the three, DaVita seems to be the most expensive with 11.88 times EV/EBITDA. Amgen is the cheapest with only 10 times EV/EBITDA, while Fresenius is valued at 10.34 times EV/EBITDA on the market. DaVita has experienced a 15.3% annualized growth in its EBITDA for the last 10 years, whereas 10-year EBITDA growth of Fresenius and Amgen were much less at 12.7% and 11.3%, respectively.

Foolish Bottom Line

Investors should dig deeper into the dialysis business in order to pick the right stock for their own portfolios. DaVita has beaten Fresenius and Amgen terms of growth. It seems that Ted Weschler like DaVita due to its huge future growth potential.

The article Is DaVita Worth a Buy? originally appeared on Fool.com and is written by Anh Hoang.

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