DaVita HealthCare Partners (DVA) versus Mednax (MD) Critical Review
DaVita HealthCare Partners (NYSE: DVA) and Mednax (NYSE:MD) are both mid-cap healthcare companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, profitability, institutional ownership, risk and valuation.
Volatility & Risk
DaVita HealthCare Partners has a beta of 0.97, meaning that its stock price is 3% less volatile than the S&P 500. Comparatively, Mednax has a beta of 0.4, meaning that its stock price is 60% less volatile than the S&P 500.
This is a breakdown of current ratings and recommmendations for DaVita HealthCare Partners and Mednax, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|DaVita HealthCare Partners||2||6||1||0||1.89|
DaVita HealthCare Partners presently has a consensus target price of $63.00, indicating a potential upside of 1.73%. Mednax has a consensus target price of $54.50, indicating a potential upside of 7.45%. Given Mednax’s stronger consensus rating and higher possible upside, analysts clearly believe Mednax is more favorable than DaVita HealthCare Partners.
Earnings and Valuation
This table compares DaVita HealthCare Partners and Mednax’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|DaVita HealthCare Partners||$14.75 billion||0.79||$879.87 million||$2.61||23.73|
|Mednax||$3.18 billion||1.49||$324.91 million||$2.83||17.92|
DaVita HealthCare Partners has higher revenue and earnings than Mednax. Mednax is trading at a lower price-to-earnings ratio than DaVita HealthCare Partners, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
85.3% of DaVita HealthCare Partners shares are held by institutional investors. Comparatively, 98.5% of Mednax shares are held by institutional investors. 2.0% of DaVita HealthCare Partners shares are held by company insiders. Comparatively, 2.4% of Mednax shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
This table compares DaVita HealthCare Partners and Mednax’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|DaVita HealthCare Partners||3.40%||13.31%||3.55%|
Mednax beats DaVita HealthCare Partners on 9 of the 14 factors compared between the two stocks.
About DaVita HealthCare Partners
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.
MEDNAX, Inc. is a provider of physician services, including newborn, anesthesia, maternal-fetal, teleradiology, pediatric cardiology and other pediatric subspecialty care. As of December 31, 2016, the Company’s national network consisted of over 3,600 affiliated physicians, including over 1,130 physicians providing neonatal clinical care, in 35 states and Puerto Rico, primarily within hospital-based neonatal intensive care units (NICUs), to babies born prematurely or with medical complications. As of December 31, 2016, the Company had over 1,390 affiliated physicians providing anesthesia care to patients in connection with surgical and other procedures, as well as pain management. As of December 31, 2016, the Company had 270 affiliated physicians providing maternal-fetal and obstetrical medical care to expectant mothers experiencing complicated pregnancies primarily in areas where its affiliated neonatal physicians practice.
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