UNIVERSAL HEALTH REALTY INCOME TRUST

Where It Passes

Where It Falls Short

• Growth13% pass✓ 3✗ 10▾

  7 of 8 flag UHT's growth — Graham, Lynch, Dreman +4 more

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Basic earnings-growth PEG (dividends excluded)P/E 30.6x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR-2.1%

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  Inventory Growth vs Revenue GrowthN/A (no inventory)

  ✓LynchInventory growth < Revenue growth

  EPS Growth Direction

  ✗DremanPositive over recent years

  EPS CAGR

  ✗Dreman> 5% annualized

  Positive Net Income Frequency27/27 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  3yr Median Revenue Growth3.6%

  ✗Ackman>= 5%

  Positive EPS Growth Frequency2/5 years with positive EPS growth

  ✗AckmanPositive EPS growth in >= 3 of last 5 years

  5-Year EPS CAGR-2.1% CAGR over 5 years

  ✗Templeton> 0% (5-year EPS CAGR)

  Revenue growth vs. gross and operating margin trendrevenue up, operating margin 32.8% -> 35.0%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  5-year Revenue CAGR4.9%

  ✗SleepCAGR > 7%

  3-5 Year Diluted EPS CAGR-2.1% over 5 years

  ✗Neff7%-20% annualized
• Efficiency13% pass✓ 2✗ 9▾

  7 of 8 flag UHT's efficiency — Graham, Buffett, Greenblatt +4 more

  Current Ratio

  ✗Graham>= 2.0

  ROIC (3-5 yr avg)4.7%

  ✗Buffett> 10%

  ROIC - WACC-5.3%

  ✗BuffettPositive (WACC = 10%)

  EBIT / (NWC + Net Fixed Assets)

  ✗Greenblatt> 25%

  Current Ratio Change YoY

  ✗PiotroskiIncreased YoY

  Revenue / Total Assets Change YoY0.17x -> 0.18x

  ✓PiotroskiImproved YoY

  Current Assets / Current Liabilities

  ✗Dreman> 1.5

  Return on Invested Capital17.9%

  ✓Munger> 15%

  ROIC (high and growing)FY2023: ROIC=4.4%; FY2024: ROIC=5.3%; FY2025: ROIC=5.2%

  ✗AkreLatest 3 consecutive FYs: ROIC > 15% in each

  Reinvestment Rate x ROIC0.0% (RR=0% x ROIC=17.9%)

  ✗AkreReinvestment Rate * ROIC > 10%

  ROIC (5-year)0/5 years above 12% (latest 5.2%)

  ✗SleepROIC > 12% in a majority of years
• Profitability19% pass✓ 13✗ 22▾

  13 of 16 flag UHT's profitability — Graham, Buffett, Lynch +10 more

  Positive EPS (10 years)25/28 years positive

  ✗GrahamPositive EPS every year for 10 years

  EPS Growth (3-yr avg, 10-yr window)

  ✗Graham>= 33% growth

  Net Income Positive (10+ years)27/28 years positive

  ✗BuffettPositive every year for 10+ years

  ROE (up to 5-year arithmetic mean)17.1%

  ✓Buffett> 15% arithmetic mean (app rule)

  Operating Margin (10-yr trend)35.0% (latest)

  ✓BuffettStable or rising over 10 years

  Free Cash Flow Proxy$35.5M

  ✓BuffettPositive and growing

  Earnings Variance (10-yr CoV)

  ✗BuffettCoV < 0.3

  Retained Earnings Effectiveness

  ✗Buffett$1 retained -> > $1 market value created

  Basic earnings-growth PEG (dividends excluded)P/E 30.6x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  3-5 Year EPS CAGR-2.1%

  ✗Lynch15-30% (Fast Grower); > 0% to pass

  ROE14.5%

  ✗Lynch> 15%

  EBIT / Enterprise Value3.8%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=3.8%, ROC=None

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Net Income / Total Assets3.12%

  ✓PiotroskiROA > 0

  ROA Change YoY3.31% -> 3.12% (delta: -0.19%)

  ✗PiotroskiCurrent ROA > Prior ROA

  (CFO / Total Assets) vs ROACFO/Assets=8.69%, ROA=3.12%

  ✓PiotroskiCFO/Assets > ROA

  Gross Margin Change YoY

  ✗PiotroskiImproved YoY

  Pre-Tax Income / Revenue

  ✗Dreman>= 8%

  Net Income / Shareholders' Equity14.5%

  ✓Dreman> 12%

  Margin of SafetyP/FFO=11.6x

  ✓PabraiP/FFO < 15

  Return on Equity10.0% (3-yr avg)

  ✗AkreROE > 20% (3-year avg)

  Discount to Intrinsic Value-106.2% (IV=$18.85 vs Price=$38.86)

  ✗Marks>= 20% below intrinsic value

  Positive Net Income Frequency27/27 years positive

  ✓MarksPositive net income in >= 7 of last 10 years

  Operating Income / Revenue35.9%

  ✓Ackman>= 15%

  Net Income / Shareholders Equity14.5%

  ✗Ackman>= 15%

  5-Year EPS CAGR-2.1% CAGR over 5 years

  ✗Templeton> 0% (5-year EPS CAGR)

  Operating Margin Trend32.8% (2023) -> 35.0% (2025)

  ✓TempletonNon-negative operating-margin trend over 3 years

  Revenue growth vs. gross and operating margin trendrevenue up, operating margin 32.8% -> 35.0%

  ✓SleepRevenue rising; gross margin flat or falling; operating margin holding

  Net income / market capitalization+3.74%; #2122/6340 (top 33.5%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Gross profit / total assets

  ✗AsnessTop 30% of eligible cross-section

  Net income / positive book equity+14.47%; #1216/5226 (top 23.3%)

  ✓AsnessTop 30% of eligible cross-section

  Negative 5-year standard deviation of ROA-0.0606; #2821/5884 (top 47.9%)

  ✗AsnessTop 30% of eligible cross-section

  3-5 Year Diluted EPS CAGR-2.1% over 5 years

  ✗Neff7%-20% annualized

  Positive Diluted-EPS Years10/10 years positive

  ✓Schloss>= 70% positive over 5-10 observed years (app rule)
• Valuation models25% pass✓ 2✗ 6▾

  Models split on UHT at $38.86 — fair values range $12.78–$91.53

  Graham fair value$17.72

  ✗Graham-119.4% margin vs $38.86

  Greenblatt fair value$19.53

  ✗Greenblatt-99.0% margin vs $38.86

  Dreman fair value$18.85

  ✗Dreman-106.2% margin vs $38.86

  Munger fair value$91.53

  ✓Munger+57.5% margin vs $38.86

  Pabrai fair value$12.78

  ✗Pabrai-204.1% margin vs $38.86

  Akre fair value$24.34

  ✗Akre-59.7% margin vs $38.86

  Marks fair value$33.60

  ✗Marks-15.7% margin vs $38.86

  Templeton fair value$39.66

  ✓Templeton+2.0% margin vs $38.86
• Valuation31% pass✓ 6✗ 19▾

  9 of 13 flag UHT's valuation — Lynch, Greenblatt, Dreman +6 more

  Price / FFO per Share11.6x

  ✓Graham<= 15x✓Dreman< 12x✓Ackman<= 25

  Basic earnings-growth PEG (dividends excluded)P/E 30.6x (growth N/A)

  ✗Lynch< 1.0 (ideally < 0.5)

  EBIT / Enterprise Value3.8%

  ✗Greenblatt> 10%

  Earnings Yield + ROC AssessmentEY=3.8%, ROC=None

  ✗GreenblattBoth EY > 10% and ROC > 25%

  Price / (CFO / Shares)11.0x

  ✗Dreman< 8x

  Valuation ReasonablenessP/E=30.6x, OE Yield=8.6%

  ✓MungerP/E < 25 or Owner Earnings Yield > 5%

  P/FFO or FFO YieldP/FFO=11.6x, FFO Yield=8.6%

  ✓PabraiP/FFO < 15 or FFO Yield > 10%

  P/B or P/E vs. Historical AverageP/E=30.6x, P/B=3.5x

  ✗MarksP/E < 15 or P/B < 2.0

  Discount to Intrinsic Value-106.2% (IV=$18.85 vs Price=$38.86)

  ✗Marks>= 20% below intrinsic value

  Price / EPS30.6x

  ✗Templeton< 12x (fixed ceiling; proxy for the market's cheapest 40%)

  Price vs. Trailing Low106% of trailing low ($36.76)

  ✓Templeton<= 120% of trailing low (certified split-adjusted live window)

  Price / Book Value per Share3.5x

  ✗Templeton< 1.5x✗SchlossP/B <= 0.80x (app cutoff)

  Net income / market capitalization+3.74%; #2122/6340 (top 33.5%)

  ✗AsnessTop 30% of eligible cross-section✗OshaughnessyTop 10% of eligible cross-section

  Positive book equity / market capitalization+0.2583; #3890/6449 (top 60.3%)

  ✗AsnessTop 30% of eligible cross-section

  Price / Diluted EPS30.6x

  ✗NeffP/E <= 15x (app proxy for a P/E 40%-60% below the market)

  (EPS CAGR % + Dividend Yield %) / P/E0.18

  ✗Neff> 0.7 (Neff's published traditional edge)

  Price / Tangible Book Value per Share3.67x

  ✗SchlossP/TBV <= 1.00x (app cutoff)

  Book Value per Share Change-4.9%

  ✗SchlossLatest BVPS >= earliest BVPS over >= 3 years (app rule)

  Revenue / market capitalization+0.1839; #3857/5247 (top 73.5%)

  ✗OshaughnessyTop 10% of eligible cross-section

  (Operating cash flow - capex) / market capitalization

  ✗OshaughnessyTop 10% of eligible cross-section

  Trailing six-month price return through the evaluation date-4.52%; #3099/6202 (top 50.0%)

  ✗OshaughnessyTop 10% of eligible cross-section
• Debt & Leverage33% pass✓ 7✗ 8▾

  8 of 12 flag UHT's debt & leverage — Graham, Buffett, Lynch +5 more

  LT Debt vs Net Current Assets

  ✗GrahamLT Debt <= Net Current Assets

  Debt/Equity & Interest CoverageD/E: 2.46, IC: 1.9x

  ✗BuffettD/E < 0.5 AND Interest Coverage > 5x

  Total Debt / Equity0.13

  ✓Lynch< 0.33

  Cash - Long-term Debt$-368.1M

  ✗LynchPositive preferred

  LT Debt / Total Assets Change63.43% -> 66.34%

  ✗PiotroskiDecreased YoY

  Current Assets / Current Liabilities

  ✗Dreman> 1.5✗SchlossCurrent ratio >= 1.50x (app cutoff)

  Total Debt / Shareholders' Equity0.13

  ✓Dreman< 0.8✓Templeton< 1.0 (fixed cap; proxy for below-sector-median leverage)✓SchlossD/E < 1.00x

  Debt Levels0.13

  ✓MungerDebt/Equity < 0.5✓AkreDebt/Equity < 0.3

  Interest Coverage & Debt/EBITDAIC=1.9x, D/EBITDA=5.9x

  ✗MarksInterest Coverage > 3x; Debt/EBITDA < 4x

  Total Debt / Shareholders Equity0.13

  ✓Ackman<= 1.0

  Negative debt-to-equity (higher means less debt)-0.1291; #1411/4210 (top 33.5%)

  ✗AsnessTop 30% of eligible cross-section
• Verdicts36% pass✓ 4✗ 7▾

  Split decision: 7 FAIL · 5 NEUTRAL · 3 PASS · 1 BUY

  Overall verdict

  ✗GrahamFAIL (2/7)✗BuffettFAIL (3/9)✗LynchFAIL (3/7)•GreenblattNot ranked✓PiotroskiPASS (F-Score 4)✓DremanPASS (4/10)✓MungerBUY (4/4)•PabraiNEUTRAL (2/3)✗AkreFAIL (1/6)✗MarksFAIL (2/5)✓AckmanPASS (5/9)•TempletonNEUTRAL (5/8)•SleepNEUTRAL (4/6)•AsnessNEUTRAL (Not ranked)✗NeffFAIL (2/6)✗SchlossFAIL (3/7)•OshaughnessyNEUTRAL (Not ranked)
• Cash Flow50% pass✓ 4✗ 3▾

  3 of 6 pass — Dreman, Neff and Oshaughnessy object

  Free Cash Flow Proxy$35.5M

  ✓BuffettPositive and growing

  Operating Cash Flow$49.1M

  ✓PiotroskiCFO > 0

  (CFO / Total Assets) vs ROACFO/Assets=8.69%, ROA=3.12%

  ✓PiotroskiCFO/Assets > ROA

  Price / (CFO / Shares)11.0x

  ✗Dreman< 8x

  Positive Operating Cash Flow frequency25/25 years positive

  ✓SleepPositive OCF in >= 70% of available years

  Operating Cash Flow - Capital Expenditures

  ✗Neff> $0 (app proxy for a strong fundamental case)

  (Operating cash flow - capex) / market capitalization

  ✗OshaughnessyTop 10% of eligible cross-section