Critical Contrast: Laboratory Co. of America (NYSE:LH) versus Fortrea (NASDAQ:FTRE)

Laboratory Co. of America (NYSE:LH) and Fortrea (NASDAQ:FTRE) are both medical companies, but which is the better investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, valuation and dividends.

Earnings and Valuation

This table compares Laboratory Co. of America and Fortrea’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Laboratory Co. of America	$12.30 billion	1.37	$418.00 million	$4.97	40.22
Fortrea	$3.11 billion	0.69	-$3.40 million	($1.39)	-17.24

Laboratory Co. of America has higher revenue and earnings than Fortrea. Fortrea is trading at a lower price-to-earnings ratio than Laboratory Co. of America, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Laboratory Co. of America and Fortrea’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Laboratory Co. of America	3.52%	14.68%	7.03%
Fortrea	-4.11%	4.76%	1.87%

Institutional and Insider Ownership

95.9% of Laboratory Co. of America shares are held by institutional investors. 0.9% of Laboratory Co. of America shares are held by company insiders. Comparatively, 0.1% of Fortrea shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Laboratory Co. of America and Fortrea, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Laboratory Co. of America	0	3	11	0	2.79
Fortrea	1	5	5	1	2.50

Laboratory Co. of America presently has a consensus price target of $241.86, suggesting a potential upside of 21.00%. Fortrea has a consensus price target of $32.30, suggesting a potential upside of 34.75%. Given Fortrea’s higher possible upside, analysts plainly believe Fortrea is more favorable than Laboratory Co. of America.

Summary

Laboratory Co. of America beats Fortrea on 12 of the 14 factors compared between the two stocks.

About Laboratory Co. of America

Laboratory Corporation of America Holdings operates as a life sciences company that provides vital information to help doctors, hospitals, pharmaceutical companies, researchers, and patients make clear and confident decisions. It operates in two segments, Labcorp Diagnostics (Dx) and Biopharma Laboratory Services (BLS). The company offers various tests, such as blood chemistry analyses, urinalyses, blood cell counts, thyroid tests, PAP tests, hemoglobin A1C and vitamin D, prostate-specific antigens, tests for sexually transmitted diseases, hepatitis C tests, microbiology cultures and procedures, and alcohol and other substance-abuse tests. It also provides specialty testing services comprising gene-based and esoteric testing; advanced tests target specific diseases; services related to anatomic pathology/oncology, cardiovascular disease, coagulation, diagnostic genetics, endocrinology, infectious disease, women's health, pharmacogenetics, parentage and donor testing, occupational testing services, medical drug monitoring services, chronic disease programs, and kidney stone prevention tests; and health and wellness services to employers and managed care organizations (MCOs), including health fairs, on-site and at-home testing, vaccinations, and health screenings. In addition, the company offers online and mobile applications that enable patients to check test results; online applications for providers, MCOs, and accountable care organizations; and drug development, medical device, and companion diagnostic development solutions from early-stage research to clinical development, as well as support for crop protection and chemical testing. It serves pharmaceutical, biotechnology, medical device, and diagnostics companies; and MCOs, employer plans, other health insurance providers, governmental agencies, physicians and other healthcare providers, hospitals and health systems, employers, patients and consumers, contract research organizations, crop protection and chemical companies, academic institutions, independent clinical laboratories, and retailers. The company was incorporated in 1994 and is headquartered in Burlington, North Carolina.

About Fortrea

Fortrea Holdings Inc., a contract research organization, primarily engages in the provision of biopharmaceutical product and medical device development services worldwide. The company operates through two segments: Clinical Services and Enabling Services. The Clinical Services segment provides across the clinical pharmacology and clinical development spectrum. The Enabling Services segment provides patient access and clinical trial technology solutions to customers that streamline complex randomization and optimize the trial drug supply process. The company offers delivery models that include full service, functional service provider, and hybrid service structures. It also offers phase I-IV clinical trial management, differentiated technology enabled trial solutions, and post approval services, as well as consulting services. The company serves pharmaceutical, biotechnology, and medical device organizations. Fortrea Holdings Inc. was incorporated in 2023 and is headquartered in Durham, North Carolina.