Analyzing Magellan Health (MGLN) & MEDNAX (MD)

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

Institutional & Insider Ownership

How to Become a New Pot Stock Millionaire

96.1% of Magellan Health shares are held by institutional investors. Comparatively, 98.5% of MEDNAX shares are held by institutional investors. 4.6% of Magellan Health shares are held by company insiders. Comparatively, 2.7% of MEDNAX shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Magellan Health and MEDNAX’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%
MEDNAX 9.26% 10.10% 5.23%

Analyst Recommendations

This is a summary of current ratings and target prices for Magellan Health and MEDNAX, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Magellan Health 0 1 3 0 2.75
MEDNAX 1 9 3 0 2.15

Magellan Health currently has a consensus target price of $90.67, suggesting a potential downside of 16.67%. MEDNAX has a consensus target price of $55.33, suggesting a potential upside of 5.20%. Given MEDNAX’s higher possible upside, analysts plainly believe MEDNAX is more favorable than Magellan Health.

Volatility and Risk

Magellan Health has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500. Comparatively, MEDNAX has a beta of 0.23, suggesting that its share price is 77% less volatile than the S&P 500.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Magellan Health $5.84 billion 0.46 $110.20 million $5.50 19.78
MEDNAX $3.46 billion 1.43 $320.37 million $3.15 16.70

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

Summary

Magellan Health beats MEDNAX on 7 of the 13 factors compared between the two stocks.

Magellan Health Company Profile

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.

MEDNAX Company Profile

MEDNAX, Inc. is a provider of physician services, including newborn, anesthesia, maternal-fetal, teleradiology, pediatric cardiology and other pediatric subspecialty care. As of December 31, 2016, the Company’s national network consisted of over 3,600 affiliated physicians, including over 1,130 physicians providing neonatal clinical care, in 35 states and Puerto Rico, primarily within hospital-based neonatal intensive care units (NICUs), to babies born prematurely or with medical complications. As of December 31, 2016, the Company had over 1,390 affiliated physicians providing anesthesia care to patients in connection with surgical and other procedures, as well as pain management. As of December 31, 2016, the Company had 270 affiliated physicians providing maternal-fetal and obstetrical medical care to expectant mothers experiencing complicated pregnancies primarily in areas where its affiliated neonatal physicians practice.

Receive News & Ratings for Magellan Health Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Magellan Health and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply