5 Best Undervalued Dividend Stocks to Buy Now

3. Quest Diagnostics Incorporated (NYSE: DGX)

Number of Hedge Fund Holders: 45

PE Ratio: 9.9    

Quest Diagnostics Incorporated (NYSE: DGX) is a New Jersey-based biotechnology firm founded in 1967. It is ranked third on our list of 10 best undervalued dividend stocks to buy now. The firm provides diagnostic and testing services mainly in the United States. Some of the brands it owns include Quest Diagnostics, AmeriPath, Dermpath Diagnostics, ExamOne, and Quanum, among others. It also operates a clinical laboratory and offers risk assessment services to the insurance industry. 

Quest Diagnostics Incorporated (NYSE: DGX) posted earnings for the first three months of 2021 in April, reporting a revenue of $2.7 billion and earnings per share of $3.76. The revenue for the first quarter of 2021 was up close to 50% compared to the same period in the previous year. 

Out of the hedge funds being tracked by Insider Monkey, Connecticut-based investment firm AQR Capital Management is a leading shareholder in Quest Diagnostics Incorporated (NYSE: DGX) with 512,701 shares worth more than $65 million. 

In its Q4 2020 investor letter, Davis Funds, an asset management firm, highlighted a few stocks and Quest Diagnostics Incorporated (NYSE: DGX) was one of them. Here is what the fund said:

“Within healthcare, our largest position is Quest Diagnostics, a leader in independent lab testing and diagnostics. Quest offers its lab services at a fraction of the cost of hospital labs, which constitutes a strong cost-savings value proposition to new and existing customers. It is not surprising that by virtue of the value Quest creates, the company is increasingly serving as an outsource partner to hospitals and healthcare networks across the U.S. We believe Quest’s market is very sticky and only getting larger. The cost savings accruing to Quest’s customers should bode well for the long-term success of the business.”