Centene Corporation (NYSE: CNC) and Magellan Health (NASDAQ:MGLN) are both medical companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, institutional ownership, profitability, valuation and risk.

Profitability

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

Net Margins Return on Equity Return on Assets
Centene Corporation 1.72% 14.62% 4.24%
Magellan Health 1.59% 8.88% 4.08%

Valuation and Earnings

This table compares Centene Corporation and Magellan Health’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Centene Corporation $43.65 billion 0.36 $2.19 billion $4.55 20.27
Magellan Health $5.28 billion 0.37 $242.58 million $3.53 23.51

Centene Corporation has higher revenue and earnings than Magellan Health. Centene 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.

Risk and Volatility

Centene Corporation has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500. Comparatively, Magellan Health has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500.

Institutional and Insider Ownership

92.3% of Centene Corporation shares are owned by institutional investors. Comparatively, 93.5% of Magellan Health shares are owned by institutional investors. 3.0% of Centene Corporation shares are owned by insiders. Comparatively, 3.6% of Magellan Health shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Centene Corporation and Magellan Health, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Centene Corporation 1 4 12 0 2.65
Magellan Health 1 0 3 0 2.50

Centene Corporation currently has a consensus target price of $91.67, indicating a potential downside of 0.60%. Magellan Health has a consensus target price of $79.75, indicating a potential downside of 3.92%. Given Centene Corporation’s stronger consensus rating and higher probable upside, research analysts plainly believe Centene Corporation is more favorable than Magellan Health.

Summary

Centene Corporation beats Magellan Health on 10 of the 14 factors compared between the two stocks.

Centene Corporation Company Profile

Centene Corporation is a healthcare company. The Company provides a portfolio of services to government sponsored healthcare programs, focusing on under-insured and uninsured individuals. The Company operates through two segments: Managed Care and Specialty Services. The Company’s Managed Care segment provides health plan coverage to individuals, through government subsidized programs, including Medicaid, the State Children’s Health Insurance Program (CHIP), Long Term Care, Foster Care, dual-eligible individuals (Duals) and the Supplemental Security Income Program, also known as the Aged, Blind or Disabled Program (ABD), Medicare, and Health Insurance Marketplace. Its Specialty Services segment consists of its specialty companies offering a range of healthcare services and products to state programs, correctional facilities, healthcare organizations, employer groups and other commercial organizations, as well as to its own subsidiaries.

Magellan Health Company Profile

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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