McKesson (NYSE:MCK) and PACS Group (NYSE:PACS) Head to Head Analysis

McKesson (NYSE:MCK) and PACS Group (NYSE:PACS) are both healthcare companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, earnings, dividends, risk, analyst recommendations and institutional ownership.

Insider & Institutional Ownership

85.1% of McKesson shares are held by institutional investors. 0.1% of McKesson shares are held by insiders. Comparatively, 70.1% of PACS Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares McKesson and PACS Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
McKesson	1.12%	-253.21%	5.90%
PACS Group	4.85%	29.55%	5.23%

Volatility & Risk

McKesson has a beta of 0.3, indicating that its share price is 70% less volatile than the S&P 500. Comparatively, PACS Group has a beta of -0.08, indicating that its share price is 108% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for McKesson and PACS Group, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
McKesson	0	4	15	0	2.79
PACS Group	0	2	5	0	2.71

McKesson presently has a consensus target price of $997.12, suggesting a potential downside of 0.39%. PACS Group has a consensus target price of $58.80, suggesting a potential upside of 28.23%. Given PACS Group’s higher possible upside, analysts clearly believe PACS Group is more favorable than McKesson.

Earnings and Valuation

This table compares McKesson and PACS Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
McKesson	$403.43 billion	0.29	$4.76 billion	$37.37	26.79
PACS Group	$5.29 billion	1.37	$191.54 million	$1.72	26.66

McKesson has higher revenue and earnings than PACS Group. PACS Group is trading at a lower price-to-earnings ratio than McKesson, indicating that it is currently the more affordable of the two stocks.

Summary

McKesson beats PACS Group on 8 of the 14 factors compared between the two stocks.

About McKesson

McKesson Corporation provides healthcare services in the United States and internationally. It operates through four segments: U.S. Pharmaceutical, Prescription Technology Solutions (RxTS), Medical-Surgical Solutions, and International. The U.S. Pharmaceutical segment distributes branded, generic, specialty, biosimilar and over-the-counter pharmaceutical drugs, and other healthcare-related products. This segment also offers practice management, technology, clinical support, and business solutions to community-based oncology and other specialty practices; and consulting, outsourcing, technological, and other services, as well as sells financial, operational, and clinical solutions to pharmacies. The RxTS segment serves biopharma and life sciences partners, and patients to address medication challenges for patients by working across healthcare; connects patients, pharmacies, providers, pharmacy benefit managers, health plans, and biopharma companies to deliver innovative solutions to help people get the medicine needed to live healthier lives; and provides prescription price transparency, benefit insight, dispensing support, third-party logistics, and wholesale distribution support services. The Medical-Surgical Solutions segment offers medical-surgical supply distribution, logistics, and other services to healthcare providers, including physician offices, surgery centers, nursing homes, hospital reference labs, and home health care agencies. The International segment provides distribution and services to wholesale, institutional, and retail customers in Europe and Canada. McKesson Corporation was founded in 1833 and is headquartered in Irving, Texas.

About PACS Group

PACS Group, Inc., through its subsidiaries, operates skilled nursing facilities and assisted living facilities in the United States. The company also provides senior care and independent facilities. It engages in the acquisition, ownership, and leasing of health care-related properties. The company was founded in 2013 and is based in Farmington, Utah.