Head to Head Comparison: McKesson (NYSE:MCK) & The Pennant Group (NASDAQ:PNTG)

The Pennant Group (NASDAQ:PNTG) and McKesson (NYSE:MCK) are both healthcare companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, earnings, institutional ownership, valuation, dividends and risk.

Insider and Institutional Ownership

85.9% of The Pennant Group shares are held by institutional investors. Comparatively, 85.1% of McKesson shares are held by institutional investors. 6.9% of The Pennant Group shares are held by insiders. Comparatively, 0.1% of McKesson shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares The Pennant Group and McKesson”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The Pennant Group	$947.71 million	1.44	$29.58 million	$0.90	43.56
McKesson	$403.43 billion	0.25	$4.76 billion	$37.37	23.56

McKesson has higher revenue and earnings than The Pennant Group. McKesson is trading at a lower price-to-earnings ratio than The Pennant Group, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares The Pennant Group and McKesson’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
The Pennant Group	2.93%	10.33%	4.20%
McKesson	1.12%	-253.21%	5.90%

Analyst Recommendations

This is a summary of current recommendations for The Pennant Group and McKesson, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The Pennant Group	0	1	7	0	2.88
McKesson	0	4	14	0	2.78

The Pennant Group presently has a consensus price target of $41.60, indicating a potential upside of 6.12%. McKesson has a consensus price target of $973.44, indicating a potential upside of 10.55%. Given McKesson’s higher possible upside, analysts clearly believe McKesson is more favorable than The Pennant Group.

Risk & Volatility

The Pennant Group has a beta of 1.27, meaning that its share price is 27% more volatile than the S&P 500. Comparatively, McKesson has a beta of 0.3, meaning that its share price is 70% less volatile than the S&P 500.

Summary

The Pennant Group beats McKesson on 8 of the 14 factors compared between the two stocks.

About The Pennant Group

The Pennant Group, Inc. provides healthcare services in the United States. It operates in two segments, Home Health and Hospice Services, and Senior Living Services. The company offers home health services, including clinical services, such as nursing, speech, occupational and physical therapy, medical social work, and home health aide services; and hospice services comprising clinical care, education, and counseling services for the physical, spiritual, and psychosocial needs of terminally ill patients and their families. It also provides senior living services, such as residential accommodations, activities, meals, housekeeping, and assistance in the activities of daily living to seniors who are independent or who require some support. The company operates home health, hospice, and home care agencies, as well as senior living communities throughout Arizona, California, Colorado, Idaho, Montana, Nevada, Oklahoma, Oregon, Texas, Utah, Washington, Wisconsin, and Wyoming. The Pennant Group, Inc. was incorporated in 2019 and is headquartered in Eagle, Idaho.

About McKesson

McKesson Corporation provides healthcare services in the United States and internationally. It operates through four segments: U.S. Pharmaceutical, Prescription Technology Solutions (RxTS), Medical-Surgical Solutions, and International. The U.S. Pharmaceutical segment distributes branded, generic, specialty, biosimilar and over-the-counter pharmaceutical drugs, and other healthcare-related products. This segment also offers practice management, technology, clinical support, and business solutions to community-based oncology and other specialty practices; and consulting, outsourcing, technological, and other services, as well as sells financial, operational, and clinical solutions to pharmacies. The RxTS segment serves biopharma and life sciences partners, and patients to address medication challenges for patients by working across healthcare; connects patients, pharmacies, providers, pharmacy benefit managers, health plans, and biopharma companies to deliver innovative solutions to help people get the medicine needed to live healthier lives; and provides prescription price transparency, benefit insight, dispensing support, third-party logistics, and wholesale distribution support services. The Medical-Surgical Solutions segment offers medical-surgical supply distribution, logistics, and other services to healthcare providers, including physician offices, surgery centers, nursing homes, hospital reference labs, and home health care agencies. The International segment provides distribution and services to wholesale, institutional, and retail customers in Europe and Canada. McKesson Corporation was founded in 1833 and is headquartered in Irving, Texas.