Comparing Magellan Health (MGLN) and Coventry Health Care (CVH)

Coventry Health Care (NYSE: CVH) and Magellan Health (NASDAQ:MGLN) are both healthcare companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, dividends, risk, profitability, analyst recommendations, earnings and institutional ownership.

Institutional & Insider Ownership

94.9% of Magellan Health shares are owned by institutional investors. 3.6% of Magellan Health shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent recommendations for Coventry Health Care and Magellan Health, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Coventry Health Care 0 0 0 0 N/A
Magellan Health 0 1 3 0 2.75

Magellan Health has a consensus target price of $90.67, suggesting a potential downside of 7.72%.

Valuation & Earnings

This table compares Coventry Health Care and Magellan Health’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Coventry Health Care N/A N/A N/A $3.29 N/A
Magellan Health $4.84 billion 0.49 $77.87 million $3.79 25.92

Magellan Health has higher revenue and earnings than Coventry Health Care. Coventry Health Care is trading at a lower price-to-earnings ratio than Magellan Health, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Coventry Health Care and Magellan Health’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Coventry Health Care N/A N/A N/A
Magellan Health 1.68% 9.20% 4.21%

Summary

Magellan Health beats Coventry Health Care on 8 of the 8 factors compared between the two stocks.

Coventry Health Care Company Profile

Coventry Health Care, Inc. (Coventry) is a diversified national managed healthcare company based in Bethesda, Maryland. Coventry operates health plans, insurance companies, network rental and workers’ compensation services companies. The Company operates in three segments: Health Plan and Medical Services, Specialized Managed Care, and Workers’ Compensation. On January 1, 2012 the Company completed its acquisition of Children’s Mercy’s Family Health Partners, a Medicaid health plan. In May 2013, Aetna Inc announced it has completed its acquisition of Coventry Health Care, Inc.

Magellan Health Company Profile

Magellan Health, Inc. is engaged in the healthcare management business. The Company’s segments include Healthcare, Pharmacy Management and Corporate. It is focused on managing special populations, complete pharmacy benefits and other specialty areas of healthcare. Its Healthcare includes its management of behavioral healthcare services and employee assistance program (EAP) services, management of other specialty areas, including diagnostic imaging and musculoskeletal management, and the integrated management of physical, behavioral and pharmaceutical healthcare for special populations, delivered through Magellan Complete Care (MCC). Its Pharmacy Management segment consists of products and solutions that provide clinical and financial management of pharmaceuticals paid under medical and pharmacy benefit programs. Its Corporate segment consists primarily of operational support functions. It provides services to health plans and other managed care organizations (MCOs).

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