Catamaran (NASDAQ: CTRX) and Molina Healthcare (NYSE:MOH) are both mid-cap healthcare companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, valuation, earnings, dividends and profitability.

Volatility and Risk

Catamaran has a beta of -0.18, meaning that its share price is 118% less volatile than the S&P 500. Comparatively, Molina Healthcare has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500.

Insider & Institutional Ownership

96.2% of Molina Healthcare shares are held by institutional investors. 6.2% of Molina Healthcare shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares Catamaran and Molina Healthcare’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Catamaran N/A N/A N/A $1.64 37.48
Molina Healthcare $17.71 billion 0.25 $52.00 million ($5.27) -14.82

Molina Healthcare has higher revenue and earnings than Catamaran. Molina Healthcare is trading at a lower price-to-earnings ratio than Catamaran, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings for Catamaran and Molina Healthcare, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Catamaran 0 0 0 0 N/A
Molina Healthcare 3 6 5 0 2.14

Molina Healthcare has a consensus price target of $64.71, suggesting a potential downside of 17.15%. Given Molina Healthcare’s higher probable upside, analysts plainly believe Molina Healthcare is more favorable than Catamaran.

Profitability

This table compares Catamaran and Molina Healthcare’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Catamaran 1.66% 6.54% 4.25%
Molina Healthcare -1.76% 17.76% 3.40%

Summary

Molina Healthcare beats Catamaran on 7 of the 10 factors compared between the two stocks.

Catamaran Company Profile

Catamaran Corporation (Catamaran) is a provider of pharmacy benefit management (PBM) services and healthcare information technology (HCIT) solutions to the healthcare benefit management industry. The Company operates in two segments: PBM and HCIT. The Company offers PBM services, which are marketed under the Catamaran PBM brand, and is engaged in owning and operating a network of mail and specialty pharmacies. In addition, the Company is a national provider of drug benefits to its customers under the federal government’s Medicare Part D program. The Company’s HCIT product offerings include a range of software products for managing prescription drug programs and for drug prescribing and dispensing. The Company’s customers include organizations in the pharmaceutical supply chain, such as pharmacy benefit managers, managed care organizations, self-insured employer groups, unions, third-party healthcare plan administrators, and state and federal government entities.

Molina Healthcare Company Profile

Molina Healthcare, Inc. offers Medicaid-related solutions for low-income families and individuals, and assists government agencies in their administration of the Medicaid program. The Company operates through three segments: Health Plans, Molina Medicaid Solutions and Other, which includes its Pathways Health and Community Support LLC (Pathways) business. It arranges healthcare services for persons served by Medicaid, Medicare, the Children’s Health Insurance Program (CHIP) and the Marketplace, and products to assist government agencies in their administration of the Medicaid program. As of December 31, 2016, the Company’s Health Plans segment consisted of health plans in 12 states and the Commonwealth of Puerto Rico, and its direct delivery business. The Molina Medicaid Solutions segment provides support to state government agencies in the administration of their Medicaid programs, including business processing, information technology development, and administrative services.

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