VCA (NASDAQ: WOOF) and H&R Block (NYSE:HRB) are both mid-cap medical companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitabiliy, earnings, analyst recommendations, institutional ownership and valuation.

Analyst Ratings

This is a summary of current ratings and price targets for VCA and H&R Block, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
VCA 0 6 1 0 2.14
H&R Block 1 5 2 0 2.13

VCA presently has a consensus target price of $89.00, suggesting a potential downside of 3.77%. H&R Block has a consensus target price of $25.71, suggesting a potential downside of 11.73%. Given VCA’s stronger consensus rating and higher possible upside, equities research analysts clearly believe VCA is more favorable than H&R Block.

Profitability

This table compares VCA and H&R Block’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
VCA 8.13% 15.61% 7.33%
H&R Block 10.85% -89.55% 14.20%

Dividends

H&R Block pays an annual dividend of $0.88 per share and has a dividend yield of 3.0%. VCA does not pay a dividend. H&R Block pays out 63.3% of its earnings in the form of a dividend.

Volatility and Risk

VCA has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500. Comparatively, H&R Block has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500.

Valuation and Earnings

This table compares VCA and H&R Block’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
VCA $2.63 billion 2.86 $513.37 million $2.61 35.44
H&R Block $3.01 billion 2.00 $821.36 million $1.39 20.96

H&R Block has higher revenue and earnings than VCA. H&R Block is trading at a lower price-to-earnings ratio than VCA, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

74.4% of VCA shares are held by institutional investors. Comparatively, 94.3% of H&R Block shares are held by institutional investors. 4.6% of VCA shares are held by company insiders. Comparatively, 1.3% of H&R Block shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

VCA beats H&R Block on 9 of the 16 factors compared between the two stocks.

VCA Company Profile

VCA Inc. is an animal healthcare company operating in the United States and Canada. The Company operates through five segments: animal hospitals (Animal Hospital), veterinary diagnostic laboratories (Laboratory), veterinary medical technology (Medical Technology), Vetstreet and Camp Bow Wow Franchising, Inc. (Camp Bow Wow). Its Animal Hospital segment provides veterinary services for companion animals and sells related retail and pharmaceutical products. Its Laboratory segment provides diagnostic laboratory testing services for veterinarians. Its Medical Technology segment sells digital radiography and ultrasound imaging equipment; provides education and training on the use of that equipment; provides consulting and mobile imaging services, and sells software and ancillary services to the veterinary market. Its Vetstreet segment provides a range of services to the veterinary community. Its Camp Bow Wow business franchises a provider of pet services.

H&R Block Company Profile

H&R Block, Inc. (H&R Block), through its subsidiaries, provides tax preparation and other services. The Company provides assisted income tax return preparation, digital do-it-yourself (DIY) tax solutions and other services and products related to income tax return preparation to the general public primarily in the United States, Canada, Australia and their respective territories. Assisted income tax return preparation and related services are provided by tax professionals through a system of retail offices operated directly by the Company or its franchisees. It offers tax support, planning, and business accounting and advisory services to its clients. The Company offers a range of online tax services, including preparation of federal and state income tax returns, review of tax returns by a tax professional, access to tax tips, advice and tax-related news, use of calculators for tax planning, error checking and electronic filing.

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