Critical Contrast: CVS Health (NYSE:CVS) and Elevance Health (NYSE:ELV)

CVS Health (NYSE:CVS) and Elevance Health (NYSE:ELV) are both large-cap medical companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, dividends, earnings and risk.

Earnings and Valuation

This table compares CVS Health and Elevance Health”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CVS Health	$402.07 billion	0.29	$1.77 billion	$1.38	65.58
Elevance Health	$199.13 billion	0.41	$5.66 billion	$23.51	16.06

Elevance Health has lower revenue, but higher earnings than CVS Health. Elevance Health is trading at a lower price-to-earnings ratio than CVS Health, indicating that it is currently the more affordable of the two stocks.

Dividends

CVS Health pays an annual dividend of $2.66 per share and has a dividend yield of 2.9%. Elevance Health pays an annual dividend of $6.88 per share and has a dividend yield of 1.8%. CVS Health pays out 192.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Elevance Health pays out 29.3% of its earnings in the form of a dividend. CVS Health has raised its dividend for 4 consecutive years and Elevance Health has raised its dividend for 14 consecutive years.

Volatility & Risk

CVS Health has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500. Comparatively, Elevance Health has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500.

Insider and Institutional Ownership

80.7% of CVS Health shares are held by institutional investors. Comparatively, 89.2% of Elevance Health shares are held by institutional investors. 0.9% of CVS Health shares are held by company insiders. Comparatively, 0.3% of Elevance Health shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares CVS Health and Elevance Health’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CVS Health	0.72%	11.88%	3.54%
Elevance Health	2.62%	15.58%	5.57%

Analyst Ratings

This is a summary of recent recommendations and price targets for CVS Health and Elevance Health, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CVS Health	0	4	22	0	2.85
Elevance Health	0	10	13	0	2.57

CVS Health currently has a consensus target price of $95.92, suggesting a potential upside of 5.99%. Elevance Health has a consensus target price of $384.58, suggesting a potential upside of 1.83%. Given CVS Health’s stronger consensus rating and higher probable upside, equities research analysts clearly believe CVS Health is more favorable than Elevance Health.

Summary

Elevance Health beats CVS Health on 10 of the 17 factors compared between the two stocks.

About CVS Health

CVS Health Corporation provides health solutions in the United States. It operates through Health Care Benefits, Health Services, and Pharmacy & Consumer Wellness segments. The Health Care Benefits segment offers traditional, voluntary, and consumer-directed health insurance products and related services. It serves employer groups, individuals, college students, part-time and hourly workers, health plans, health care providers, governmental units, government-sponsored plans, labor groups, and expatriates. The Health Services segment offers pharmacy benefit management solutions, including plan design and administration, formulary management, retail pharmacy network management, specialty and mail order pharmacy, clinical, disease management, and medical spend management services. It serves employers, insurance companies, unions, government employee groups, health plans, prescription drug plans, Medicaid managed care plans, CMS, plans offered on public health insurance, and other sponsors of health benefit plans. The Pharmacy & Consumer Wellness segment sells prescription and over-the-counter drugs, consumer health and beauty products, and personal care products. This segment also distributes prescription drugs; and provides related pharmacy consulting and other ancillary services to care facilities and other care settings. It operates online retail pharmacy websites, LTC pharmacies and on-site pharmacies, retail specialty pharmacy stores, compounding pharmacies and branches for infusion and enteral nutrition services. The company was formerly known as CVS Caremark Corporation and changed its name to CVS Health Corporation in September 2014. CVS Health Corporation was incorporated in 1996 and is headquartered in Woonsocket, Rhode Island.

About Elevance Health

Elevance Health, Inc., together with its subsidiaries, operates as a health benefits company in the United States. The company operates through four segments: Health Benefits, CarelonRx, Carelon Services, and Corporate & Other. It offers a variety of health plans and services to program members; health products; an array of fee-based administrative managed care services; and specialty and other insurance products and services, such as stop loss, dental, vision, life, disability, and supplemental health insurance benefits. The company operates in the pharmacy services business; and markets and offers pharmacy services, including pharmacy benefit management, as well as home delivery and specialty pharmacies, claims adjudication, formulary management, pharmacy networks, rebate administration, a prescription drug database, and member services. In addition, it provides healthcare-related services and capabilities, including utilization management, behavioral health, integrated care delivery, palliative care, payment integrity services, subrogation services, and health and wellness programs, as well as services related to data management, information technology, and business operations. Further, the company is involved in the National Government Services business. The company provides its services under the Anthem Blue Cross and Blue Shield, Wellpoint, and Carelon brand names. The company was formerly known as Anthem, Inc. and changed its name to Elevance Health, Inc. in June 2022. Elevance Health, Inc. was incorporated in 2001 and is headquartered in Indianapolis, Indiana.