Critical Analysis: WellCare Health Plans (WCG) vs. Magellan Health (MGLN)
WellCare Health Plans (NYSE: WCG) and Magellan Health (NASDAQ:MGLN) are both medical companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.
This table compares WellCare Health Plans and Magellan Health’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|WellCare Health Plans||1.66%||14.91%||4.12%|
Earnings & Valuation
This table compares WellCare Health Plans and Magellan Health’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|WellCare Health Plans||$15.36 billion||0.50||$623.20 million||$5.69||30.26|
|Magellan Health||$5.28 billion||0.37||$242.58 million||$3.53||23.22|
WellCare Health Plans has higher revenue and earnings than Magellan Health. Magellan Health is trading at a lower price-to-earnings ratio than WellCare Health Plans, indicating that it is currently the more affordable of the two stocks.
Risk and Volatility
WellCare Health Plans has a beta of 0.88, meaning that its stock price is 12% less volatile than the S&P 500. Comparatively, Magellan Health has a beta of 0.57, meaning that its stock price is 43% less volatile than the S&P 500.
This is a summary of recent ratings and target prices for WellCare Health Plans and Magellan Health, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|WellCare Health Plans||0||9||4||0||2.31|
WellCare Health Plans presently has a consensus price target of $172.18, indicating a potential downside of 0.01%. Magellan Health has a consensus price target of $80.25, indicating a potential downside of 2.07%. Given WellCare Health Plans’ higher probable upside, equities research analysts plainly believe WellCare Health Plans is more favorable than Magellan Health.
Insider & Institutional Ownership
97.8% of WellCare Health Plans shares are owned by institutional investors. Comparatively, 93.5% of Magellan Health shares are owned by institutional investors. 0.5% of WellCare Health Plans shares are owned by company insiders. Comparatively, 3.6% of Magellan Health 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.
WellCare Health Plans beats Magellan Health on 12 of the 14 factors compared between the two stocks.
About WellCare Health Plans
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.
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).
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