They're pretty much health-care axioms: The older we get, the more often we visit the doctor. The more often we visit the doctor, the more tests the doctor runs on us. And now the good part for investors: The more tests the doctors run on us, the better business becomes for Motley Fool Stock Advisor selection and value-hound favorite LabCorp (NYSE:LH) -- the proof of which lies in LabCorp's fiscal 2004 earnings report, released on Tuesday.

For the year, LabCorp grew its revenues by an amount so underwhelming it's almost painful -- just 4.9% over its 2003 results. But earnings are another story, having increased a healthy 13.1% for the year. Even better, earnings per diluted share strengthened to a robust 16.1%, dropping $2.45 per share in profits to the bottom line.

I should probably explain the disparity in these numbers. Although revenues didn't increase much, the profits that LabCorp managed to squeeze out of every sales dollar more than made up for the subpar sales growth. The company expanded its operating margins by 130 basis points to 25.5% and its net margins by 90 basis points to 11.8%.

But margin expansion was only half of the profits-growth story this year. The other half was share buybacks. Don't let the mere $84 million increase in LabCorp's bank account fool you. This company actually generated much more cash than that this year. It just spent most of that cash on buying back its own stock -- $378 million worth, in fact, or about 8.8 million shares.

LabCorp currently trades for 19.4 times its trailing earnings. Compare that with the company's two primary rivals: The larger Quest Diagnostics (NYSE:DGX) has a 20.9 price-to-earnings ratio but only a 17.4% operating margin and 9.7% net. And smaller Specialty Laboratories (NYSE:SP) was at last report (its 2004 earnings release is not due out until next week) still a money-losing operation, with negative operating and net margins, and, consequently, no meaningful P/E.

A 19.4 P/E is not an obvious, absolute bargain price when attached to a company that, like Lab Corp, is expected to grow earnings by an average of 12% per annum over the next five years. But relative to the pricier Quest and the unprofitable Specialty Laboratories, it's at least a relative bargain price at which investors can own an interest in this essential piece of the health-care market.

Fool contributor Rich Smith has no position in any of the companies mentioned in this article.