Pharmerica Corporation (NYSE: PMC) and CVS Health Corporation (NYSE:CVS) are both medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitabiliy, dividends and valuation.
Volatility and Risk
Pharmerica Corporation has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500. Comparatively, CVS Health Corporation has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500.
Insider and Institutional Ownership
92.7% of Pharmerica Corporation shares are owned by institutional investors. Comparatively, 81.9% of CVS Health Corporation shares are owned by institutional investors. 5.2% of Pharmerica Corporation shares are owned by company insiders. Comparatively, 0.6% of CVS Health Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Valuation and Earnings
This table compares Pharmerica Corporation and CVS Health Corporation’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Pharmerica Corporation||$2.13 billion||0.38||$130.20 million||$0.67||38.51|
|CVS Health Corporation||$178.83 billion||0.44||$12.81 billion||$4.80||16.18|
CVS Health Corporation has higher revenue and earnings than Pharmerica Corporation. CVS Health Corporation is trading at a lower price-to-earnings ratio than Pharmerica Corporation, indicating that it is currently the more affordable of the two stocks.
CVS Health Corporation pays an annual dividend of $2.00 per share and has a dividend yield of 2.6%. Pharmerica Corporation does not pay a dividend. CVS Health Corporation pays out 41.7% of its earnings in the form of a dividend. CVS Health Corporation has raised its dividend for 9 consecutive years.
This is a breakdown of current ratings and recommmendations for Pharmerica Corporation and CVS Health Corporation, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|CVS Health Corporation||0||7||12||0||2.63|
CVS Health Corporation has a consensus price target of $94.27, suggesting a potential upside of 21.43%. Given CVS Health Corporation’s higher probable upside, analysts clearly believe CVS Health Corporation is more favorable than Pharmerica Corporation.
This table compares Pharmerica Corporation and CVS Health Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|CVS Health Corporation||2.86%||17.56%||6.64%|
CVS Health Corporation beats Pharmerica Corporation on 11 of the 16 factors compared between the two stocks.
Pharmerica Corporation Company Profile
PharMerica Corporation is an institutional pharmacy services company. The Company services healthcare facilities, provides pharmacy management services to hospitals and specialty infusion services to patients outside a hospital setting, and offers the national oncology pharmacy in the United States. Its segments include institutional pharmacy, which provides pharmacy products and services to residents and patients in skilled nursing facilities, nursing centers, assisted living facilities, hospitals and other long-term alternative care settings; specialty infusion services, which provides specialty infusion services focused on providing pharmaceutical products and clinical services to patients in client facilities, hospice and outside of hospital or nursing home settings, and specialty oncology pharmacy, which provides dispensing of oncology drugs, care management and other related services to patients, oncology practices and hospitals.
CVS Health Corporation Company Profile
CVS Health Corporation, together with its subsidiaries, is an integrated pharmacy healthcare company. The Company provides pharmacy care for the senior community through Omnicare, Inc. (Omnicare) and Omnicare’s long-term care (LTC) operations, which include distribution of pharmaceuticals, related pharmacy consulting and other ancillary services to chronic care facilities and other care settings. It operates through three segments: Pharmacy Services, Retail/LTC and Corporate. The Pharmacy Services Segment provides a range of pharmacy benefit management (PBM) solutions to its clients. As of December 31, 2016, the Retail/LTC Segment included 9,709 retail locations (of which 7,980 were its stores that operated a pharmacy and 1,674 were its pharmacies located within Target Corporation (Target) stores), its online retail pharmacy Websites, CVS.com, Navarro.com and Onofre.com.br, 38 onsite pharmacy stores, its long-term care pharmacy operations and its retail healthcare clinics.
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