HCA

HCA is a high-quality, scale hospital operator trading like a troubled one. Revenue has grown every year — $58.8B (2021) → $75.6B (2025), +7.1% in the latest year — while net income expanded +17.8% to $6.78B (9.0% net margin) and operating cash flow jumped +20.2% to $12.636B. MD&A attributes the cash-flow gain to a $1.319B rise in net income ex-D&A plus $524M of positive working-capital change. After ~$4.94B of capex, that leaves roughly $7.7B of free cash flow, comfortably covering interest and the $679M dividend. At a 13.2x P/E and 1.1x P/S, the market is pricing minimal growth into a business that keeps delivering it.

The scary-looking metrics are capital-allocation choices, not signs of distress. Stockholders' equity is -$6.03B and retained earnings -$5.72B, and ROE (-112.6%) is mathematically meaningless — both are the direct result of returning more cash to owners than GAAP equity can absorb. HCA repurchased $10.067B of stock in 2025 (+66.6% YoY), shrinking the share count 10% and driving diluted EPS up +28.8% to $28.33 — far outpacing net income growth. The Board completed the January 2025 authorization down to $750M remaining and re-loaded with a fresh $10B authorization in January 2026, so the buyback engine that powers per-share compounding is funded to continue.