Centene Corporation (NYSE: CNC) and WellCare Health Plans (NYSE:WCG) are both mid-cap medical companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, profitability, earnings, dividends, analyst recommendations and institutional ownership.

Risk & Volatility

Centene Corporation has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500. Comparatively, WellCare Health Plans has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500.

Insider & Institutional Ownership

92.1% of Centene Corporation shares are held by institutional investors. Comparatively, 97.7% of WellCare Health Plans shares are held by institutional investors. 3.0% of Centene Corporation shares are held by insiders. Comparatively, 0.5% of WellCare Health Plans shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations for Centene Corporation and WellCare Health Plans, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Centene Corporation 1 4 13 0 2.67
WellCare Health Plans 0 9 7 0 2.44

Centene Corporation presently has a consensus target price of $94.94, indicating a potential upside of 4.42%. WellCare Health Plans has a consensus target price of $180.93, indicating a potential upside of 7.75%. Given WellCare Health Plans’ higher probable upside, analysts clearly believe WellCare Health Plans is more favorable than Centene Corporation.

Earnings and Valuation

This table compares Centene Corporation and WellCare Health Plans’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Centene Corporation $43.65 billion 0.36 $2.19 billion $4.55 19.98
WellCare Health Plans $15.36 billion 0.49 $623.20 million $5.69 29.51

Centene Corporation has higher revenue and earnings than WellCare Health Plans. Centene Corporation 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 Centene Corporation and WellCare Health Plans’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Centene Corporation 1.72% 14.62% 4.24%
WellCare Health Plans 1.66% 14.91% 4.12%

About Centene Corporation

Centene Corporation is a healthcare company. The Company provides a portfolio of services to government sponsored healthcare programs, focusing on under-insured and uninsured individuals. The Company operates through two segments: Managed Care and Specialty Services. The Company’s Managed Care segment provides health plan coverage to individuals, through government subsidized programs, including Medicaid, the State Children’s Health Insurance Program (CHIP), Long Term Care, Foster Care, dual-eligible individuals (Duals) and the Supplemental Security Income Program, also known as the Aged, Blind or Disabled Program (ABD), Medicare, and Health Insurance Marketplace. Its Specialty Services segment consists of its specialty companies offering a range of healthcare services and products to state programs, correctional facilities, healthcare organizations, employer groups and other commercial organizations, as well as to its own subsidiaries.

About WellCare Health Plans

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.

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