Air Methods Corp (NASDAQ: AIRM) and Laboratory Corporation of America Holdings (NYSE:LH) are both healthcare companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, valuation, analyst recommendations, profitability, institutional ownership and risk.

Profitability

This table compares Air Methods Corp and Laboratory Corporation of America Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Air Methods Corp 6.67% 14.18% 4.43%
Laboratory Corporation of America Holdings 7.57% 16.85% 6.55%

Earnings & Valuation

This table compares Air Methods Corp and Laboratory Corporation of America Holdings’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Air Methods Corp N/A N/A N/A $2.59 16.58
Laboratory Corporation of America Holdings $9.67 billion 1.60 $1.86 billion $7.12 21.30

Laboratory Corporation of America Holdings has higher revenue and earnings than Air Methods Corp. Air Methods Corp is trading at a lower price-to-earnings ratio than Laboratory Corporation of America Holdings, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Air Methods Corp has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500. Comparatively, Laboratory Corporation of America Holdings has a beta of 0.92, meaning that its stock price is 8% less volatile than the S&P 500.

Insider & Institutional Ownership

93.2% of Laboratory Corporation of America Holdings shares are owned by institutional investors. 9.0% of Air Methods Corp shares are owned by insiders. Comparatively, 0.9% of Laboratory Corporation of America Holdings shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for Air Methods Corp and Laboratory Corporation of America Holdings, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Air Methods Corp 0 3 1 0 2.25
Laboratory Corporation of America Holdings 0 5 6 0 2.55

Air Methods Corp currently has a consensus target price of $42.50, indicating a potential downside of 1.05%. Laboratory Corporation of America Holdings has a consensus target price of $165.10, indicating a potential upside of 8.85%. Given Laboratory Corporation of America Holdings’ stronger consensus rating and higher probable upside, analysts clearly believe Laboratory Corporation of America Holdings is more favorable than Air Methods Corp.

Summary

Laboratory Corporation of America Holdings beats Air Methods Corp on 9 of the 11 factors compared between the two stocks.

About Air Methods Corp

Air Methods Corporation is engaged in providing air medical emergency transport services and systems throughout the United States. The Company’s segments include Air Medical Services (AMS), Tourism and United Rotorcraft (UR) Division. As of December 31, 2016, its AMS Division provided air medical transportation services in 41 states to the general population as an independent service (also called community-based services) and to hospitals or other institutions under exclusive operating agreements (also called hospital-based services). It transports persons requiring intensive medical care from either the scene of an accident or general care hospitals to skilled trauma centers or tertiary care centers. As of December 31, 2016, its Air Medical Services Division operated 394 helicopters and 31 fixed wing aircrafts under both Instrument Flight Rules (IFR) and Visual Flight Rules (VFR). As of December 31, 2016, its Tourism Division operated 63 helicopters and two fixed wing aircrafts.

About Laboratory Corporation of America Holdings

Laboratory Corporation of America Holdings is a life sciences company that is integrated in guiding patient care, providing clinical laboratory and end-to-end drug development services. The Company operates as a healthcare diagnostics company. The Company operates through two segments: LabCorp Diagnostics (LCD) and Covance Drug Development (CDD). The LCD segment is an independent clinical laboratory business, which offers menu of frequently requested and specialty testing through an integrated network of primary and specialty laboratories across the United States. The CDD segment offers drug development services, and provides a range of drug research and development (R&D) and market access services to biopharmaceutical companies and medical device companies across the world. It serves a range of customers, including managed care organizations (MCOs), biopharmaceutical companies, governmental agencies, physicians and other healthcare providers.

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