HCA Healthcare's earnings per share have compounded at 13.3% annually over the past three years, far outpacing its 7.9% revenue growth rate, as operating margin expansion and aggressive share buybacks magnify per-share profits. The company's operating margin rose from 14.6% two years ago to 15.7% over the last twelve months, while a 19.3% reduction in outstanding shares over three years concentrated earnings among fewer shares. Despite revenue growth slowing to 6.7% in the last year, the stock trades at a trailing price-to-earnings multiple of 12.7, in the lower half of its 10-year range of 7.6 to 17.6, suggesting the market may be overlooking the earnings compounding engine.
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Universal Health Services IncHCA Healthcare, Inc.Article highlights HCA's earnings compounding via margin expansion and buybacks, with a low P/E suggesting undervaluation.
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