Universal Health Realty Income Trust Common Stock (UHT)

FairStock Score: 43/100 — MIXED

Key Financials

Strengths

• Generates $46 million in annual free cash flow (8.1% yield on market cap)
• Solid return on equity of 10.6% above cost of capital
• Attractive 7.3% dividend yield providing steady income returns

Concerns

• Trades significantly above Graham Number ($18) with negative 130% margin of safety—limited downside protection
• High leverage at 2.53x debt-to-equity increases financial risk and interest expense burden
• Revenue declining at 0.7% year-over-year signals potential demand weakness or market share loss

AI Analysis

Universal Health Realty Income Trust Common Stock is a micro-cap real estate company valued at $565 million. Revenue stands at $101 million. From a quality standpoint, Universal shows Altman Z-Score of 2.5 in the grey zone and adequate 11% ROE. On valuation, the stock is trading at a premium 32.0x earnings, with trades far above its Graham Number ($18) with no margin of safety. Growth dynamics show revenue growing at -0.7% and profit growth of -7.2%. The 7.3% dividend yield adds an income component for patient holders. Our composite FairStock Score of 43/100 reflects below-average fundamentals overall. Investors should weigh the business quality against the current price and their own margin of safety requirements.

Bull Case

Improving fundamentals and sector tailwinds could drive meaningful earnings growth, compressing the effective multiple for patient investors. With $46 million in annual free cash flow (8.1% yield), management has ample capital for buybacks, dividends, or accretive acquisitions.

Bear Case

At 32x earnings, any growth disappointment triggers rapid multiple compression—a 20% earnings miss plus multiple contraction to 20x implies 40%+ downside. Regulatory changes, input cost inflation, or demand normalization represent underappreciated risks that could materially impact forward estimates.

Data from SEC filings. AI analysis is for educational purposes only — not investment advice. Scoring methodology · Disclaimer