HCA Holdings (NYSE: HCA) and Diplomat Pharmacy (NYSE:DPLO) are both medical companies, but which is the better stock? We will compare the two businesses based on the strength of their institutional ownership, risk, valuation, earnings, analyst recommendations, profitability and dividends.

Institutional & Insider Ownership

74.7% of HCA Holdings shares are owned by institutional investors. Comparatively, 70.3% of Diplomat Pharmacy shares are owned by institutional investors. 2.9% of HCA Holdings shares are owned by company insiders. Comparatively, 30.2% of Diplomat Pharmacy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and target prices for HCA Holdings and Diplomat Pharmacy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HCA Holdings 0 5 15 0 2.75
Diplomat Pharmacy 1 8 3 0 2.17

HCA Holdings currently has a consensus price target of $89.74, indicating a potential upside of 18.62%. Diplomat Pharmacy has a consensus price target of $18.78, indicating a potential downside of 10.78%. Given HCA Holdings’ stronger consensus rating and higher probable upside, equities analysts clearly believe HCA Holdings is more favorable than Diplomat Pharmacy.

Profitability

This table compares HCA Holdings and Diplomat Pharmacy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HCA Holdings 6.64% -48.08% 7.90%
Diplomat Pharmacy 0.27% 7.97% 4.47%

Risk and Volatility

HCA Holdings has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500. Comparatively, Diplomat Pharmacy has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500.

Valuation and Earnings

This table compares HCA Holdings and Diplomat Pharmacy’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
HCA Holdings $42.27 billion 0.65 $8.20 billion $7.47 10.13
Diplomat Pharmacy $4.53 billion 0.32 $70.47 million $0.17 123.82

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

Summary

HCA Holdings beats Diplomat Pharmacy on 10 of the 14 factors compared between the two stocks.

HCA Holdings Company Profile

HCA Healthcare, Inc., formerly HCA Holdings, Inc., is a holding company. The Company, through its subsidiaries, owns and operates hospitals and related healthcare entities. As of December 31, 2016, the Company operated in two geographically organized groups, including the National and American Groups. As of December 31, 2016, the National Group included 84 hospitals, which were located in Alaska, California, Florida, southern Georgia, Idaho, Indiana, northern Kentucky, Nevada, New Hampshire, South Carolina, Utah and Virginia. As of December 31, 2016, the American Group included 80 hospitals, which were located in Colorado, northern Georgia, Kansas, southern Kentucky, Louisiana, Mississippi, Missouri, Oklahoma, Tennessee and Texas. As of December 31, 2016, the Company operated six hospitals in England. The Company owns, manages or operates hospitals, freestanding surgery centers and freestanding emergency care facilities, walk-in clinics, diagnostic and imaging centers, among others.

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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