This company is engaged in the provision of health care. It was founded in 1968 by Dr. Thomas Frist, his father Dr. Thomas Frist Sr. and Jack C. Massey. The company is now headquartered in Nashville. Although its stock is near an all-time high, it saw a solid decline last week. Let's dive into the company's business and uncover its potential.

The company focuses on a wide range of healthcare services, including acute care, complex surgical and cancer care, obstetrical services and other specialty medical fields. $HCA is known for its emphasis on quality and affordable healthcare, which it provides to millions of patients annually. The company also invests in technological innovation and research, which allows it to continually improve its services and contribute to medical advancements.

HCA Healthcare was one of the first healthcare providers to adopt an electronic health record (EHR). The company has invested heavily in the development and implementation of a state-of-the-art EHR system, which has allowed it to better track and manage patient care, improve communication among medical staff, and increase the overall efficiency of its healthcare facilities.

Additionally, HCA Healthcare is known for its extensive training and development programs for its employees. The company offers a wide range of training programs, scholarships, and other professional development opportunities to help its employees grow and improve their skills.

Management

Samuel N. Hazen - CEO

Mr. Hazen, who has been with $HCA for 41 years, was named CEO on January 1, 2019 after serving as President and COO since 2016.

Samuel served in various leadership roles for HCA Healthcare, including President of Operations, from 2011-2015. From 2001-2010, he served as president of HCA Healthcare Western Group, which included all operations west of the Mississippi River and accounted for approximately half of the company's revenue. Prior to 2001, Hazen was chief financial officer of Western Group. Prior to 1995, he was CFO for two different divisions within the company, overseeing operations in North Texas and various other markets.

Hazen began his career with Humana's Financial Management Specialist Program in 1983 and has held CFO positions at hospitals in Georgia and Las Vegas. He currently serves on the boards of the Nashville Health Care Council, the Federation of American Hospitals and the HCA Healthcare Foundation.

Mr. Samuel Hazen received a Bachelor of Science degree in Finance from the University of Kentucky and a Master of Business Administration degree from the University of Nevada Las Vegas.

Industry/Specialty of the Company

Acute Care: $HCA operates hospitals that provide emergency medical care for patients with serious and life-threatening conditions. These facilities are equipped with state-of-the-art technology and trained staff to provide prompt and effective treatment.

Surgical Care: The company offers a wide range of surgical services, including general surgery, orthopedics and neurosurgery. Emphasis is placed on minimally invasive techniques that reduce recovery time and the risk of complications.

Cardiology: The firm has extensive programs focused on the treatment of heart disease, including preventive cardiology, interventional procedures and cardiovascular surgery. HCA Healthcare focuses on innovative treatments that improve patients' prognosis and quality of life.

Obstetrical and Gynecological Services: $HCA provides comprehensive care for women, including prenatal care, childbirth and postpartum care. In addition, it offers gynecological services and treatment for women of all ages, promoting the overall health and well-being of women.

Cancer Care: HCA Healthcare specializes in comprehensive cancer care, providing advanced diagnostic methods, individualized treatment plans and support services to help patients and their families manage treatment and recovery.

The company's profitability and cash

The company is in nice profit since the beginning of the year in terms of price per share. But at the very end of last week, its price took a significant plunge in a way that hasn't happened in a long time. During Friday, the price fell by 6.39%. So currently, one share on the market will fetch around $320.

The company's current market capitalization is $84.15 billion. This is almost the highest value. As recently as last week, the stock was there. On Friday, before the stock started selling off, it was even at its highest price ($344.16). The company employs 310,000 people worldwide.

But the breakdown of share ownership is interesting. Even though the company was founded in 1968, it is still 27.65% privately owned. The remaining 189.49 million shares, or 72.35% of all shares ever issued, are on the market among investors. The company's debt is $42.1 billion. The cash that management now has is $1.38 billion.

In 2019, the company's revenue was at $51.34 billion. The operating margins were at 6.83% and so the net profit was $3.51 billion. A year later, when the pandemic broke out, sales declined. Revenue was $51.53 billion in 2020. However, the profit margin managed to increase to 7.28% and the net profit went to $3.75 billion as a result. Certainly the most successful year for the company was 2021. Revenue grew to $58.75 billion. However, margins increased to 11.84%. The company made just under $7 billion (6.96) that year. Revenue growth continued in the last two years, but it was at the expense of margins, which declined. In 2022, revenues were $60.23 billion. Profit margin was 9.37% and net profit was USD 5.64 billion. Last year, revenue peaked at $64.97 billion. But margins were down to 8.07% and net profit was $5.24 billion.

The company provides its services mostly in the United States, but is making inroads into other countries as time goes on. However, the US is still its main base where the company focuses all its attention. This country is harder for us in Europe to understand from a health point of view because health services are really expensive there and only a small percentage of people have health insurance. But that's why the business is booming there. Therefore, 94.8% of the company's total sales come from the US. Last year it was $61.59 billion. The remaining $3 billion and $380 million comes from sales from other countries.

Earnings per share were at $6.87 in 2016. That was 2.16% above analysts' estimates. In the next two years, the company gracefully came in above the market consensus as well. By 2018, EPS had grown to $9.77. By 2020, growth slowed but persisted. Earnings per share were $11.61 in the covid year. In 2021, there was a significant increase to $17.5. But despite this jump, the company was 1.94% below market estimates. By 2022, that gap between reality and consensus had shrunk to 0.73%. Earnings per share were $16.89 in 2022. Last year, the company finally beat estimates by 4.44%. Earnings per share were $19.01. This year and in the years ahead (through 2027 where estimates extend), EPS should continue to increase. In 2027, they could then reach $29.87 cents.

Revenue was $41.49 billion in 2016. But not much has changed with revenue over the years, and so it is still slowly but surely growing to this day. The only decline occurred between 2019 and 2020 when the pandemic began. By 2018, their value had reached $46.68 billion and by 2020 it was already $51.53 billion. By 2021, the value of revenue had reached $58.75 billion. However, the last 2 years have managed to maintain the growth despite this jump and by 2023 we could see $64.97 billion in revenue. As with earnings per share, the growth trend should continue to develop. Thus, by 2027, revenues could look at $82.05 billion, which is almost double the value the company generated in 2016.

Almost all of the company's industries have managed to get to a higher revenue value at their origin as of 2017. However, the largest share of revenue is from the insurance the company provides. The value of revenue from this sector has gone from $24.81 billion in 2017 to $31.82 billion last year. In contrast, the international insurance specialty generates the least revenue value. This went from $1.1 billion to $1.51 billion over the same time period.

Operating expenses

The company's costs have moved steadily higher as it has developed. In 2010, management needed $6.6 billion to operate one quarter. However, this amount increased to $8.5 billion by 2015. The company needed to invest in research and development as well as in the operation and innovation of its existing buildings. By increasing revenues, it could afford to spend more and more. By 2019, spending growth continued. It was not until 2020 that a reduction occurred. In the second quarter of 2020, spending decreased by $1.4 billion. But growth returned in the next quarter. By the first quarter of 2024, spending was at an all-time high of $14 billion and $781 million due to rapidly growing revenues.

Dividend

The company began paying a quarterly dividend in 2018. The first payout was 35 cents per share. Since then, it has been increasing until 2020. The first dividend of 2020 was at 43 cents per share. Here the payout was suspended for a year. It resumed at the beginning of 2021 at 48 cents. Today, stockholders can look forward to 66 cents per share held each quarter. The annual dividend yield is 0.82%.

Valuation/Comparison to peers

The company's P/E ratio increased very rapidly from 2010 to 2014. during this period, the price per share increased, but earnings per share did not increase much. From 3.5 in 2010, the P/E ratio climbed to 16.9 in 2014. Since then, however, the ratio has not gotten to higher levels. The stock started rising very similarly to EPS. By 2016, the P/E had fallen to 9.53 points. But the ratio reached its lowest point since then in 2020, when it was only 7.97. Today, the P/E stands at 16 points. The stock is still rising, but in recent years it's been rising faster than EPS. However, in the next few years, the two figures should level out again. It may even be that the P/E will fall due to the rapid growth in earnings per share.

Rivals

Tenet Healthcare $THC: Tenet Healthcare is focused on providing quality and affordable healthcare through its hospitals and other medical facilities. The company is known for its comprehensive care in areas such as surgery, cardiology, orthopedics, oncology and other specialty medical services. Tenet also invests in innovation and technology to improve its medical services and provide patients with the best possible care.

DaVita $DVA: is a leading U.S. company specializing in providing healthcare to patients with chronic kidney failure and other kidney diseases. The company offers hemodialysis and peritoneal dialysis, focusing on the individual needs of each patient. DaVita is also committed to kidney disease prevention and education, helping patients better manage their health problems and improve their quality of life.

UnitedHealth $UNH: UnitedHealthcare is the largest health insurer in the United States and provides a wide range of insurance products and services to individuals, employees, state and federal programs, including Medicare and Medicaid. The insurer offers plans that include primary care, specialists, prescription drugs, and other health services, and is known for its emphasis on preventive care and healthy living.

Blue - $HCA, Yellow - $UNH, Turquoise - $DVA, Orange - $THC

All of the healthcare companies in today's comparison and many others have found a way to grow in recent years. After the covid pandemic, which most of these companies capitalized on, their business model has seen a strengthening and digitization. A larger customer base and an increasingly older population is pushing them to maximize revenues, which are growing. This trend is expected to continue in the coming years. Thebest performing company is $THC, which has improved 258% in the last 4 years and 6 months.

Future plans

Technological innovation: HCA Healthcare continues to focus on investing in technology innovation, including expanding the use of electronic health records (EHRs), telemedicine, and other digital health platforms. These technologies have not only improved efficiency and quality of care, but have also increased the availability of healthcare services for patients, especially during the COVID-19 pandemic.

Expanding the network of health facilities: The Company plans to continue to expand its network of hospitals and outpatient facilities. This expansion includes the acquisition of new hospitals and medical centers, enabling HCA Healthcare to provide its services to a wider population and strengthen its market position.

Enhancing the quality and safety of care: $HCA places a strong emphasis on continuously improving the quality and safety of the care it provides. This includes the implementation of the latest clinical practices and standards, as well as training and education of healthcare staff. HCA Healthcare strives to be a leader in clinical excellence and patient satisfaction.

Financial Stability and Investment: HCA Healthcare is a financially stable company that regularly generates strong financial results. This stability allows the company to continue to invest in new technology, expand its services and improve the quality of care. Financial strength also provides flexibility to address potential challenges and opportunities in the marketplace.

Outlook

The stock is now only a few percent away from its absolute peak. However, with the outlook for its business still at high numbers, it now looks like it is just the earnings collection that shareholders have been waiting for. As early as July 23, the company will be reporting its quarterly results. Earnings per share are expected to be $4.924 and revenue could reach $17.049 billion, according to consensus. At both figures, that would be a nice increase from last year. The last two quarters management estimates have been beaten. How do seasoned Wall Street analysts view the future price per share?

Of the 26 analysts surveyed, 15 of them would buy the stock now. Their outlook is so strong that they anticipate growth of up to 25.17% over the next twelve months. Another 3 analysts b also bought the company, but their estimates are already slightly lower. Here, a 12% growth to a price of $355 per share of $HCA would be enough for them. But the last 8 analysts would just hold the stock, possibly waiting for a better price to enter.

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