Aetna (NYSE: AET) and Catamaran Corp (NASDAQ:CTRX) are both medical companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, valuation, profitability, earnings and institutional ownership.

Valuation and Earnings

This table compares Aetna and Catamaran Corp’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Aetna $62.20 billion 0.84 $6.06 billion $4.58 34.54
Catamaran Corp N/A N/A N/A N/A N/A

Aetna has higher revenue and earnings than Catamaran Corp.

Insider & Institutional Ownership

89.6% of Aetna shares are owned by institutional investors. 0.9% of Aetna shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Aetna and Catamaran Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aetna 2.52% 20.52% 5.35%
Catamaran Corp 1.66% 6.54% 4.25%

Analyst Recommendations

This is a summary of recent ratings for Aetna and Catamaran Corp, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aetna 0 5 14 0 2.74
Catamaran Corp 0 0 0 0 N/A

Aetna presently has a consensus price target of $159.38, indicating a potential upside of 0.75%. Given Aetna’s higher possible upside, research analysts plainly believe Aetna is more favorable than Catamaran Corp.

Dividends

Aetna pays an annual dividend of $2.00 per share and has a dividend yield of 1.3%. Catamaran Corp does not pay a dividend. Aetna pays out 43.7% of its earnings in the form of a dividend.

Summary

Aetna beats Catamaran Corp on 9 of the 10 factors compared between the two stocks.

Aetna Company Profile

Aetna Inc. is a diversified healthcare benefits company. The Company operates through three segments: Health Care, Group Insurance and Large Case Pensions. It offers a range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life and disability plans, medical management capabilities, Medicaid healthcare management services, Medicare Advantage and Medicare Supplement plans, workers’ compensation administrative services and health information technology (HIT) products and services. The Health Care segment consists of medical, pharmacy benefit management services, dental, behavioral health and vision plans offered on both an Insured basis and an employer-funded basis, and emerging businesses products and services. The Group Insurance segment includes group life insurance and group disability products. Its products are offered on an Insured basis.

Catamaran Corp Company Profile

Catamaran Corporation (Catamaran) is a provider of pharmacy benefit management (PBM) services and healthcare information technology (HCIT) solutions to the healthcare benefit management industry. The Company operates in two segments: PBM and HCIT. The Company offers PBM services, which are marketed under the Catamaran PBM brand, and is engaged in owning and operating a network of mail and specialty pharmacies. In addition, the Company is a national provider of drug benefits to its customers under the federal government’s Medicare Part D program. The Company’s HCIT product offerings include a range of software products for managing prescription drug programs and for drug prescribing and dispensing. The Company’s customers include organizations in the pharmaceutical supply chain, such as pharmacy benefit managers, managed care organizations, self-insured employer groups, unions, third-party healthcare plan administrators, and state and federal government entities.

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