Anthem (NYSE: ANTM) and Health Net (NYSE:HNT) 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, earnings, dividends, risk, institutional ownership, profitabiliy and valuation.

Dividends

Anthem pays an annual dividend of $2.60 per share and has a dividend yield of 1.4%. Health Net does not pay a dividend. Anthem pays out 28.2% of its earnings in the form of a dividend. Health Net has increased its dividend for 2 consecutive years.

Institutional & Insider Ownership

88.2% of Anthem shares are held by institutional investors. 0.4% of Anthem shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Anthem and Health Net, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Anthem 0 9 7 0 2.44
Health Net 0 0 0 0 N/A

Anthem presently has a consensus target price of $162.47, indicating a potential downside of 13.39%. Given Anthem’s higher possible upside, analysts plainly believe Anthem is more favorable than Health Net.

Profitability

This table compares Anthem and Health Net’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Anthem 2.91% 12.08% 4.58%
Health Net N/A N/A N/A

Earnings & Valuation

This table compares Anthem and Health Net’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Anthem $87.08 billion 0.57 $6.01 billion $9.21 20.37
Health Net N/A N/A N/A N/A N/A

Anthem has higher revenue and earnings than Health Net.

Summary

Anthem beats Health Net on 9 of the 12 factors compared between the two stocks.

About Anthem

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.

About Health Net

Health Net, Inc. (Health Net) is a managed care organization. The Company provides managed health care services through health plans and government-sponsored managed care plans. Its segments are Western Region Operations and Government Contracts. It provides and administers health benefits to approximately 6 million individuals across the United States through group, individual, Medicare, Medicaid, dual eligible, the United States Department of Defense (Department of Defense or DoD), including TRICARE, and the United States Department of Veterans Affairs programs. Through its subsidiaries, it also offers behavioral health, substance abuse and employee assistance programs, managed health care products related to prescription drugs, managed health care product coordination for multi-region employers, and administrative services for medical groups and self-funded benefits programs.

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