DaVita HealthCare Partners (NYSE: DVA) and Diplomat Pharmacy (NYSE:DPLO) are both medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their dividends, institutional ownership, risk, earnings, profitability, analyst recommendations and valuation.

Earnings and Valuation

This table compares DaVita HealthCare Partners and Diplomat Pharmacy’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
DaVita HealthCare Partners $14.75 billion 0.77 $879.87 million $6.50 9.13
Diplomat Pharmacy $4.41 billion 0.32 $28.27 million $0.17 119.94

DaVita HealthCare Partners has higher revenue and earnings than Diplomat Pharmacy. DaVita HealthCare Partners is trading at a lower price-to-earnings ratio than Diplomat Pharmacy, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares DaVita HealthCare Partners and Diplomat Pharmacy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DaVita HealthCare Partners 8.68% 14.02% 3.78%
Diplomat Pharmacy 0.27% 7.97% 4.47%

Insider & Institutional Ownership

82.8% of DaVita HealthCare Partners shares are owned by institutional investors. Comparatively, 70.3% of Diplomat Pharmacy shares are owned by institutional investors. 2.1% of DaVita HealthCare Partners shares are owned by insiders. Comparatively, 30.2% of Diplomat Pharmacy shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for DaVita HealthCare Partners and Diplomat Pharmacy, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DaVita HealthCare Partners 2 6 1 0 1.89
Diplomat Pharmacy 1 8 3 0 2.17

DaVita HealthCare Partners currently has a consensus target price of $65.00, indicating a potential upside of 9.58%. Diplomat Pharmacy has a consensus target price of $18.78, indicating a potential downside of 7.89%. Given DaVita HealthCare Partners’ higher possible upside, analysts clearly believe DaVita HealthCare Partners is more favorable than Diplomat Pharmacy.

Volatility & Risk

DaVita HealthCare Partners has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500. Comparatively, Diplomat Pharmacy has a beta of 0.74, meaning that its share price is 26% less volatile than the S&P 500.

Summary

DaVita HealthCare Partners beats Diplomat Pharmacy on 9 of the 14 factors compared between the two stocks.

About DaVita HealthCare Partners

DaVita Inc., formerly DaVita HealthCare Partners Inc., operates two divisions: DaVita Kidney Care (Kidney Care) and DaVita Medical Group (DMG). The Kidney Care division consists of its the United States dialysis and related lab services, its ancillary services and strategic initiatives, including its international operations, and its corporate administrative support. Its DMG division is a patient- and physician-focused integrated healthcare delivery and management company that provides medical services to members through capitation contracts. Its segments include U.S. dialysis and related lab services, DMG, and Other-Ancillary services and strategic initiatives. Its U.S. dialysis and related lab services line of business provide kidney dialysis services in the United States for patients suffering from chronic kidney failure, also known as end stage renal disease (ESRD). As of December 31, 2016, it had operated or provided administrative services to 154 outpatient dialysis centers.

About Diplomat Pharmacy

Diplomat Pharmacy, Inc. (Diplomat) operates a specialty pharmacy business, which stocks, dispenses and distributes prescriptions for various biotechnology and specialty pharmaceutical manufacturers. The Company operates through specialty pharmacy services segment. The Company’s primary focus is on medication management programs for individuals with chronic diseases, including oncology, immunology, hepatitis, multiple sclerosis, specialty infusion therapy, and various other serious and/or long-term conditions. The Company provides specialty pharmacy support services to a national network of retailers and independent pharmacy groups, hospitals and health systems. The Company offers various services, such as specialty drug dispensing, retail specialty services, hospital and health system services, and hub services. The Company’s patient care system is used to coordinate and track patient adherence and safety.

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