Head to Head Comparison: Magellan Health (MGLN) vs. Select Medical (SEM)

Magellan Health (NASDAQ: MGLN) and Select Medical (NYSE:SEM) are both mid-cap medical companies, but which is the superior business? We will compare the two businesses based on the strength of their analyst recommendations, dividends, risk, institutional ownership, profitability, valuation and earnings.

Earnings & Valuation

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This table compares Magellan Health and Select Medical’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Magellan Health $5.84 billion 0.45 $110.20 million $5.50 19.46
Select Medical $4.44 billion 0.54 $177.18 million $0.97 18.51

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

Risk and Volatility

Magellan Health has a beta of 0.5, meaning that its share price is 50% less volatile than the S&P 500. Comparatively, Select Medical has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Magellan Health and Select Medical, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Magellan Health 0 1 3 0 2.75
Select Medical 0 2 5 0 2.71

Magellan Health currently has a consensus price target of $90.67, indicating a potential downside of 15.30%. Select Medical has a consensus price target of $20.57, indicating a potential upside of 14.60%. Given Select Medical’s higher possible upside, analysts clearly believe Select Medical is more favorable than Magellan Health.

Profitability

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

Net Margins Return on Equity Return on Assets
Magellan Health 1.89% 10.86% 4.91%
Select Medical 3.99% 14.27% 2.52%

Institutional and Insider Ownership

97.3% of Magellan Health shares are owned by institutional investors. Comparatively, 76.4% of Select Medical shares are owned by institutional investors. 3.6% of Magellan Health shares are owned by insiders. Comparatively, 19.9% of Select Medical shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Select Medical beats Magellan Health on 8 of the 14 factors compared between the two stocks.

About Magellan Health

Magellan Health, Inc. provides healthcare management services in the United States. It operates in Healthcare and Pharmacy Management segments. The Healthcare segment offers carve-out management services for behavioral health; employee assistance plans (EAP); and other areas of specialty healthcare, including diagnostic imaging, musculoskeletal management, cardiac, and physical medicine for health plans, care organizations, and employers. It also contracts with local, state, and federal governmental agencies to provide services to recipients under Medicaid, Medicare, and other government programs, such as behavioral health and EAP, as well as healthcare management and long term support services through its network of medical and behavioral health professionals, clinics, hospitals, nursing facilities, home care agencies, and ancillary service providers. The Pharmacy Management segment comprises products and solutions that provide clinical and financial management of pharmaceuticals paid under medical and pharmacy benefit programs. This segment offers pharmacy benefit management services, pharmacy benefit administration for state Medicaid and other government sponsored programs, pharmaceutical dispensing services, clinical and formulary management programs, medical pharmacy management programs, and programs for the integrated management of specialty drugs that treat complex conditions. The company provides services to health plans and other managed care organizations, employers, labor unions, various military and governmental agencies, and third party administrators. Magellan Health, Inc. was founded in 1969 and is headquartered in Scottsdale, Arizona.

About Select Medical

Select Medical Holdings Corporation, through its subsidiary, Select Medical Corporation, operates acute care hospitals (LTCHs), inpatient rehabilitation facilities (IRFs), outpatient rehabilitation clinics, and occupational medicine centers in the United States. The company operates through four segments: Long Term Acute Care, Inpatient Rehabilitation, Outpatient Rehabilitation, and Concentra. The Long Term Acute Care segment consists of hospitals that provide services for heart failure, infectious disease, respiratory failure and pulmonary disease, surgery requiring recovery, renal disease, neurological events, and trauma. As of December 31, 2017, it operated 100 LTCHs in 27 states. The Inpatient Rehabilitation segment offers therapy and rehabilitation treatments, including rehabilitative services for brain and spinal cord injuries, strokes, amputations, neurological disorders, orthopedic conditions, pediatric congenital or acquired disabilities, and cancer. As of December 31, 2017, it operated 24 IRFs in 10 states. The Outpatient Rehabilitation segment operates rehabilitation clinics that provide physical, occupational, and speech rehabilitation programs and services; and specialized programs, such as functional programs for work related injuries, hand therapy, post-concussion rehabilitation, and athletic training services. As of December 31, 2017, it operated 1,616 facilities in 37 states and the District of Columbia The company's Concentra segment operates and provides medical centers and contract services at employer worksites and Department of Veterans Affairs community-based outpatient clinics (CBOCs) that deliver occupational medicine, consumer health, physical therapy, and veteran's healthcare services. This segment operated 312 medical centers, 105 onsite clinics at employer worksites, and 32 Department of Veterans Affairs CBOCs in 43 states. Select Medical Holdings Corporation was founded in 1996 and is headquartered in Mechanicsburg, Pennsylvania.

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