Quest Diagnostics Incorporated (DGX)
Return on total capital
| Dec 31, 2023 | Sep 30, 2023 | Jun 30, 2023 | Mar 31, 2023 | Dec 31, 2022 | Sep 30, 2022 | Jun 30, 2022 | Mar 31, 2022 | Dec 31, 2021 | Sep 30, 2021 | Jun 30, 2021 | Mar 31, 2021 | Dec 31, 2020 | Sep 30, 2020 | Jun 30, 2020 | Mar 31, 2020 | Dec 31, 2019 | Sep 30, 2019 | Jun 30, 2019 | Mar 31, 2019 | ||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Earnings before interest and tax (EBIT) (ttm) | US$ in thousands | 1,265,000 | 1,120,000 | 1,160,000 | 1,160,000 | 1,358,000 | 1,767,000 | 2,089,000 | 2,586,000 | 2,744,000 | 3,012,000 | 3,103,000 | 2,550,000 | 2,057,000 | 1,616,000 | 1,151,000 | 1,193,000 | 1,285,000 | 1,126,000 | 1,107,000 | 1,076,000 |
| Long-term debt | US$ in thousands | 4,410,000 | — | — | — | 3,978,000 | — | — | — | 4,010,000 | — | — | — | 4,013,000 | 4,018,000 | 4,020,000 | 4,033,000 | 3,966,000 | 3,188,000 | 3,169,000 | 3,131,000 |
| Total stockholders’ equity | US$ in thousands | 6,307,000 | 6,425,000 | 6,249,000 | 6,050,000 | 5,893,000 | 6,235,000 | 6,411,000 | 6,377,000 | 6,444,000 | 6,392,000 | 5,899,000 | 6,745,000 | 6,759,000 | 6,400,000 | 5,831,000 | 5,657,000 | 5,641,000 | 5,605,000 | 5,459,000 | 5,290,000 |
| Return on total capital | 11.80% | 17.43% | 18.56% | 19.17% | 13.76% | 28.34% | 32.58% | 40.55% | 26.25% | 47.12% | 52.60% | 37.81% | 19.10% | 15.51% | 11.68% | 12.31% | 13.38% | 12.81% | 12.83% | 12.78% |
December 31, 2023 calculation
Return on total capital = EBIT (ttm) ÷ (Long-term debt + Total stockholders’ equity)
= $1,265,000K ÷ ($4,410,000K + $6,307,000K)
= 11.80%
The return on total capital for Quest Diagnostics, Inc. has shown a decreasing trend over the past quarters. In Q4 2023, the return on total capital was 11.92%, which declined from 12.47% in Q1 2023. This downward trend follows a peak in Q2 2022, where the return on total capital was at its highest at 22.44%. While the return on total capital has been relatively stable in the double-digit range, it is important for the company to closely monitor and manage its capital allocation and efficiency to maintain sustainable returns for its investors.
Peer comparison
Dec 31, 2023