Magellan Health (NASDAQ: MGLN) and Cigna Corporation (NYSE:CI) are both healthcare companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, valuation, dividends, earnings, institutional ownership, analyst recommendations and risk.

Institutional and Insider Ownership

93.5% of Magellan Health shares are owned by institutional investors. Comparatively, 86.9% of Cigna Corporation shares are owned by institutional investors. 3.6% of Magellan Health shares are owned by company insiders. Comparatively, 1.3% of Cigna Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Magellan Health and Cigna Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Magellan Health $5.28 billion 0.35 $242.58 million $3.53 22.39
Cigna Corporation $40.53 billion 1.10 $4.21 billion $8.68 20.09

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

Dividends

Cigna Corporation pays an annual dividend of $0.04 per share and has a dividend yield of 0.0%. Magellan Health does not pay a dividend. Cigna Corporation pays out 0.5% of its earnings in the form of a dividend.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Magellan Health and Cigna Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Magellan Health 1 0 3 0 2.50
Cigna Corporation 0 2 15 0 2.88

Magellan Health currently has a consensus price target of $80.25, suggesting a potential upside of 1.52%. Cigna Corporation has a consensus price target of $179.56, suggesting a potential upside of 2.97%. Given Cigna Corporation’s stronger consensus rating and higher possible upside, analysts plainly believe Cigna Corporation is more favorable than Magellan Health.

Profitability

This table compares Magellan Health and Cigna Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Magellan Health 0.35% 1.94% 0.81%
Cigna Corporation 7.46% 17.40% 4.04%

Risk & Volatility

Magellan Health has a beta of 0.59, meaning that its stock price is 41% less volatile than the S&P 500. Comparatively, Cigna Corporation has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500.

Summary

Cigna Corporation beats Magellan Health on 11 of the 16 factors compared between the two stocks.

About Magellan Health

Magellan Health, Inc. is engaged in the healthcare management business. The Company’s segments include Healthcare, Pharmacy Management and Corporate. It is focused on managing special populations, complete pharmacy benefits and other specialty areas of healthcare. Its Healthcare includes its management of behavioral healthcare services and employee assistance program (EAP) services, management of other specialty areas, including diagnostic imaging and musculoskeletal management, and the integrated management of physical, behavioral and pharmaceutical healthcare for special populations, delivered through Magellan Complete Care (MCC). Its Pharmacy Management segment consists of products and solutions that provide clinical and financial management of pharmaceuticals paid under medical and pharmacy benefit programs. Its Corporate segment consists primarily of operational support functions. It provides services to health plans and other managed care organizations (MCOs).

About Cigna Corporation

Cigna Corporation (Cigna), together with its subsidiaries, is a health services company. The Company offers medical, dental, disability, life and accident insurance and related products and services. The Company’s segments include Global Health Care, Global Supplemental Benefits, Group Disability and Life, and Other Operations and Corporate. Its Global Health Care segment aggregates the commercial and Government operating segments. Its commercial operating segment encompasses the United States commercial and certain international healthcare businesses serving employers and their employees, other groups, and individuals. Its Global Supplemental Benefits segment offers supplemental health, life and accident insurance products in selected international markets and in the United States. Its Group Disability and Life segment provides group long-term and short-term disability insurance, group life insurance, accident and specialty insurance and related services.

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