WellCare Health Plans (WCG) versus Coventry Health Care (CVH) Critical Review

WellCare Health Plans (NYSE: WCG) and Coventry Health Care (NYSE:CVH) are both healthcare companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, risk, earnings, profitability, valuation and dividends.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for WellCare Health Plans and Coventry Health Care, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
WellCare Health Plans 0 8 8 0 2.50
Coventry Health Care 0 0 0 0 N/A

WellCare Health Plans presently has a consensus price target of $212.86, suggesting a potential downside of 2.63%.

Institutional & Insider Ownership

99.6% of WellCare Health Plans shares are held by institutional investors. 0.5% of WellCare Health Plans shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares WellCare Health Plans and Coventry Health Care’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
WellCare Health Plans $14.24 billion 0.68 $242.10 million $7.97 27.43
Coventry Health Care N/A N/A N/A $3.29 N/A

WellCare Health Plans has higher revenue and earnings than Coventry Health Care. Coventry Health Care is trading at a lower price-to-earnings ratio than WellCare Health Plans, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares WellCare Health Plans and Coventry Health Care’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
WellCare Health Plans 2.21% 19.42% 5.17%
Coventry Health Care N/A N/A N/A

Summary

WellCare Health Plans beats Coventry Health Care on 8 of the 8 factors compared between the two stocks.

WellCare Health Plans Company Profile

WellCare Health Plans, Inc. is a managed care company. The Company focuses on government-sponsored managed care services, primarily through Medicaid, Medicare Advantage (MA) and Medicare Prescription Drug Plans (PDPs), to families, children, seniors and individuals with medical needs. The Company operates through three segments: Medicaid Health Plans, Medicare Health Plans and Medicare PDPs. As of December 31, 2016, it served approximately 3.9 million members in 50 states and the District of Columbia. As of December 31, 2016, it operated Medicaid health plans in Arizona, Florida, Georgia, Hawaii, Illinois, Kentucky, Missouri, New Jersey, New York and South Carolina. As of December 31, 2016, it offered MA coordinated care plans (CCPs) in certain counties in Arizona, Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Illinois, Kentucky, Louisiana, Mississippi, New Jersey, New York, South Carolina, Tennessee and Texas.

Coventry Health Care Company Profile

Coventry Health Care, Inc. (Coventry) is a diversified national managed healthcare company based in Bethesda, Maryland. Coventry operates health plans, insurance companies, network rental and workers’ compensation services companies. The Company operates in three segments: Health Plan and Medical Services, Specialized Managed Care, and Workers’ Compensation. On January 1, 2012 the Company completed its acquisition of Children’s Mercy’s Family Health Partners, a Medicaid health plan. In May 2013, Aetna Inc announced it has completed its acquisition of Coventry Health Care, Inc.

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