DaVita HealthCare Partners (NYSE: DVA) and Diplomat Pharmacy (NYSE:DPLO) are both medical companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, risk, earnings, dividends and institutional ownership.

Institutional and Insider Ownership

82.8% of DaVita HealthCare Partners shares are held by institutional investors. Comparatively, 70.6% of Diplomat Pharmacy shares are held by institutional investors. 2.1% of DaVita HealthCare Partners shares are held by company insiders. Comparatively, 30.2% of Diplomat Pharmacy shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares DaVita HealthCare Partners and Diplomat Pharmacy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DaVita HealthCare Partners 8.68% 14.02% 3.78%
Diplomat Pharmacy 0.27% 7.97% 4.47%

Volatility and Risk

DaVita HealthCare Partners has a beta of 0.9, indicating that its stock price is 10% less volatile than the S&P 500. Comparatively, Diplomat Pharmacy has a beta of 0.74, indicating that its stock price is 26% less volatile than the S&P 500.

Valuation and Earnings

This table compares DaVita HealthCare Partners and Diplomat Pharmacy’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
DaVita HealthCare Partners $15.01 billion 0.79 $2.45 billion $6.50 9.52
Diplomat Pharmacy $4.53 billion 0.32 $70.47 million $0.17 123.82

DaVita HealthCare Partners has higher revenue and earnings than Diplomat Pharmacy. DaVita HealthCare Partners is trading at a lower price-to-earnings ratio than Diplomat Pharmacy, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations for DaVita HealthCare Partners and Diplomat Pharmacy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DaVita HealthCare Partners 2 6 2 0 2.00
Diplomat Pharmacy 1 8 3 0 2.17

DaVita HealthCare Partners presently has a consensus price target of $65.00, indicating a potential upside of 5.03%. Diplomat Pharmacy has a consensus price target of $18.78, indicating a potential downside of 10.78%. Given DaVita HealthCare Partners’ higher probable upside, research analysts clearly believe DaVita HealthCare Partners is more favorable than Diplomat Pharmacy.

Summary

DaVita HealthCare Partners beats Diplomat Pharmacy on 9 of the 14 factors compared between the two stocks.

DaVita HealthCare Partners Company Profile

DaVita Inc., formerly DaVita HealthCare Partners Inc., operates two divisions: DaVita Kidney Care (Kidney Care) and DaVita Medical Group (DMG). The Kidney Care division consists of its the United States dialysis and related lab services, its ancillary services and strategic initiatives, including its international operations, and its corporate administrative support. Its DMG division is a patient- and physician-focused integrated healthcare delivery and management company that provides medical services to members through capitation contracts. Its segments include U.S. dialysis and related lab services, DMG, and Other-Ancillary services and strategic initiatives. Its U.S. dialysis and related lab services line of business provide kidney dialysis services in the United States for patients suffering from chronic kidney failure, also known as end stage renal disease (ESRD). As of December 31, 2016, it had operated or provided administrative services to 154 outpatient dialysis centers.

Diplomat Pharmacy Company Profile

Diplomat Pharmacy, Inc. (Diplomat) operates a specialty pharmacy business, which stocks, dispenses and distributes prescriptions for various biotechnology and specialty pharmaceutical manufacturers. The Company operates through specialty pharmacy services segment. The Company’s primary focus is on medication management programs for individuals with chronic diseases, including oncology, immunology, hepatitis, multiple sclerosis, specialty infusion therapy, and various other serious and/or long-term conditions. The Company provides specialty pharmacy support services to a national network of retailers and independent pharmacy groups, hospitals and health systems. The Company offers various services, such as specialty drug dispensing, retail specialty services, hospital and health system services, and hub services. The Company’s patient care system is used to coordinate and track patient adherence and safety.

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