Head-To-Head Survey: Molina Healthcare (MOH) versus Anthem (ANTM)

Molina Healthcare (NYSE: MOH) and Anthem (NYSE:ANTM) are both mid-cap medical companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, earnings, profitability, risk and dividends.

Dividends

Anthem pays an annual dividend of $2.80 per share and has a dividend yield of 1.3%. Molina Healthcare does not pay a dividend. Anthem pays out 25.3% of its earnings in the form of a dividend. Anthem has raised its dividend for 2 consecutive years.

Valuation and Earnings

This table compares Molina Healthcare and Anthem’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Molina Healthcare $17.71 billion 0.24 $52.00 million ($6.07) -12.32
Anthem $84.86 billion 0.67 $2.47 billion $11.06 19.97

Anthem has higher revenue and earnings than Molina Healthcare. Molina Healthcare is trading at a lower price-to-earnings ratio than Anthem, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

98.0% of Molina Healthcare shares are held by institutional investors. Comparatively, 87.5% of Anthem shares are held by institutional investors. 6.2% of Molina Healthcare shares are held by company insiders. Comparatively, 0.4% of Anthem shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

Molina Healthcare has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500. Comparatively, Anthem has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500.

Profitability

This table compares Molina Healthcare and Anthem’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Molina Healthcare -1.76% 17.76% 3.40%
Anthem 3.35% 12.97% 4.97%

Analyst Recommendations

This is a summary of recent ratings and target prices for Molina Healthcare and Anthem, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Molina Healthcare 3 6 5 0 2.14
Anthem 0 7 10 0 2.59

Molina Healthcare presently has a consensus price target of $64.71, indicating a potential downside of 13.47%. Anthem has a consensus price target of $199.50, indicating a potential downside of 9.66%. Given Anthem’s stronger consensus rating and higher possible upside, analysts plainly believe Anthem is more favorable than Molina Healthcare.

Summary

Anthem beats Molina Healthcare on 11 of the 17 factors compared between the two stocks.

Molina Healthcare Company Profile

Molina Healthcare, Inc. offers Medicaid-related solutions for low-income families and individuals, and assists government agencies in their administration of the Medicaid program. The Company operates through three segments: Health Plans, Molina Medicaid Solutions and Other, which includes its Pathways Health and Community Support LLC (Pathways) business. It arranges healthcare services for persons served by Medicaid, Medicare, the Children’s Health Insurance Program (CHIP) and the Marketplace, and products to assist government agencies in their administration of the Medicaid program. As of December 31, 2016, the Company’s Health Plans segment consisted of health plans in 12 states and the Commonwealth of Puerto Rico, and its direct delivery business. The Molina Medicaid Solutions segment provides support to state government agencies in the administration of their Medicaid programs, including business processing, information technology development, and administrative services.

Anthem Company Profile

Anthem, Inc. is a health benefits company. The Company operates through three segments: Commercial and Specialty Business, Government Business and Other. It offers a spectrum of network-based managed care plans to large and small employer, individual, Medicaid and Medicare markets. Its managed care plans include preferred provider organizations; health maintenance organizations; point-of-service plans; indemnity plans and other hybrid plans, including consumer-driven health plans; and hospital only and limited benefit products. It also provides an array of managed care services to self-funded customers, including claims processing, underwriting, stop loss insurance, actuarial services, provider network access, medical cost management, disease management, wellness programs and other administrative services. It provides an array of specialty and other insurance products and services, such as dental, vision, life and disability insurance benefits and radiology benefit management.

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