Comparing Diplomat Pharmacy (DPLO) & Laboratory Corporation of America Holdings (LH)

Laboratory Corporation of America Holdings (NYSE: LH) and Diplomat Pharmacy (NYSE:DPLO) are both medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, dividends, risk, analyst recommendations and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Laboratory Corporation of America Holdings and Diplomat Pharmacy, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Laboratory Corporation of America Holdings 0 5 7 0 2.58
Diplomat Pharmacy 1 4 3 0 2.25

Laboratory Corporation of America Holdings presently has a consensus target price of $168.91, suggesting a potential upside of 12.26%. Diplomat Pharmacy has a consensus target price of $19.56, suggesting a potential downside of 0.50%. Given Laboratory Corporation of America Holdings’ stronger consensus rating and higher possible upside, equities analysts clearly believe Laboratory Corporation of America Holdings is more favorable than Diplomat Pharmacy.

Earnings and Valuation

This table compares Laboratory Corporation of America Holdings and Diplomat Pharmacy’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Laboratory Corporation of America Holdings $9.64 billion 1.59 $732.10 million $7.15 21.04
Diplomat Pharmacy $4.41 billion 0.31 $28.27 million $0.12 163.83

Laboratory Corporation of America Holdings has higher revenue and earnings than Diplomat Pharmacy. Laboratory Corporation of America Holdings is trading at a lower price-to-earnings ratio than Diplomat Pharmacy, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Laboratory Corporation of America Holdings and Diplomat Pharmacy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Laboratory Corporation of America Holdings 7.40% 16.75% 6.43%
Diplomat Pharmacy 0.18% 8.30% 4.70%

Volatility & Risk

Laboratory Corporation of America Holdings has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500. Comparatively, Diplomat Pharmacy has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500.

Insider & Institutional Ownership

93.8% of Laboratory Corporation of America Holdings shares are held by institutional investors. Comparatively, 67.4% of Diplomat Pharmacy shares are held by institutional investors. 0.9% of Laboratory Corporation of America Holdings shares are held by insiders. Comparatively, 30.2% of Diplomat Pharmacy shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Summary

Laboratory Corporation of America Holdings beats Diplomat Pharmacy on 12 of the 14 factors compared between the two stocks.

About Laboratory Corporation of America Holdings

Laboratory Corporation of America Holdings is a life sciences company that is integrated in guiding patient care, providing clinical laboratory and end-to-end drug development services. The Company operates as a healthcare diagnostics company. The Company operates through two segments: LabCorp Diagnostics (LCD) and Covance Drug Development (CDD). The LCD segment is an independent clinical laboratory business, which offers menu of frequently requested and specialty testing through an integrated network of primary and specialty laboratories across the United States. The CDD segment offers drug development services, and provides a range of drug research and development (R&D) and market access services to biopharmaceutical companies and medical device companies across the world. It serves a range of customers, including managed care organizations (MCOs), biopharmaceutical companies, governmental agencies, physicians and other healthcare providers.

About Diplomat Pharmacy

Diplomat Pharmacy, Inc. (Diplomat) operates a specialty pharmacy business, which stocks, dispenses and distributes prescriptions for various biotechnology and specialty pharmaceutical manufacturers. The Company operates through specialty pharmacy services segment. The Company’s primary focus is on medication management programs for individuals with chronic diseases, including oncology, immunology, hepatitis, multiple sclerosis, specialty infusion therapy, and various other serious and/or long-term conditions. The Company provides specialty pharmacy support services to a national network of retailers and independent pharmacy groups, hospitals and health systems. The Company offers various services, such as specialty drug dispensing, retail specialty services, hospital and health system services, and hub services. The Company’s patient care system is used to coordinate and track patient adherence and safety.

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