WellCare Health Plans (WCG) versus Aetna (NYSE:AET) Financial Analysis
WellCare Health Plans (NYSE: WCG) and Aetna (NYSE:AET) are both mid-cap medical companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, valuation and profitabiliy.
Valuation & Earnings
This table compares WellCare Health Plans and Aetna’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|WellCare Health Plans||$14.65 billion||0.56||$656.20 million||$6.08||30.24|
|Aetna||$62.63 billion||0.83||$5.73 billion||$3.21||48.69|
Aetna has higher revenue and earnings than WellCare Health Plans. WellCare Health Plans is trading at a lower price-to-earnings ratio than Aetna, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
WellCare Health Plans has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500. Comparatively, Aetna has a beta of 0.54, meaning that its share price is 46% less volatile than the S&P 500.
This is a summary of recent recommendations for WellCare Health Plans and Aetna, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|WellCare Health Plans||0||11||3||0||2.21|
WellCare Health Plans presently has a consensus target price of $165.18, suggesting a potential downside of 10.16%. Aetna has a consensus target price of $153.24, suggesting a potential downside of 1.97%. Given Aetna’s stronger consensus rating and higher possible upside, analysts clearly believe Aetna is more favorable than WellCare Health Plans.
Insider and Institutional Ownership
98.8% of WellCare Health Plans shares are owned by institutional investors. Comparatively, 91.8% of Aetna shares are owned by institutional investors. 0.5% of WellCare Health Plans shares are owned by company insiders. Comparatively, 1.1% of Aetna shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
This table compares WellCare Health Plans and Aetna’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|WellCare Health Plans||1.85%||14.75%||4.37%|
Aetna pays an annual dividend of $2.00 per share and has a dividend yield of 1.3%. WellCare Health Plans does not pay a dividend. Aetna pays out 62.3% of its earnings in the form of a dividend.
Aetna beats WellCare Health Plans on 10 of the 16 factors compared between the two stocks.
WellCare Health Plans Company Profile
WellCare Health Plans, Inc. is a managed care company. The Company focuses on government-sponsored managed care services, primarily through Medicaid, Medicare Advantage (MA) and Medicare Prescription Drug Plans (PDPs), to families, children, seniors and individuals with medical needs. The Company operates through three segments: Medicaid Health Plans, Medicare Health Plans and Medicare PDPs. As of December 31, 2016, it served approximately 3.9 million members in 50 states and the District of Columbia. As of December 31, 2016, it operated Medicaid health plans in Arizona, Florida, Georgia, Hawaii, Illinois, Kentucky, Missouri, New Jersey, New York and South Carolina. As of December 31, 2016, it offered MA coordinated care plans (CCPs) in certain counties in Arizona, Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Illinois, Kentucky, Louisiana, Mississippi, New Jersey, New York, South Carolina, Tennessee and Texas.
Aetna Company Profile
Aetna Inc. is a diversified healthcare benefits company. The Company operates through three segments: Health Care, Group Insurance and Large Case Pensions. It offers a range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life and disability plans, medical management capabilities, Medicaid healthcare management services, Medicare Advantage and Medicare Supplement plans, workers’ compensation administrative services and health information technology (HIT) products and services. The Health Care segment consists of medical, pharmacy benefit management services, dental, behavioral health and vision plans offered on both an Insured basis and an employer-funded basis, and emerging businesses products and services. The Group Insurance segment includes group life insurance and group disability products. Its products are offered on an Insured basis.
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