Mednax (MD) vs. Laboratory Corporation of America Holdings (LH) Critical Contrast
Mednax (NYSE: MD) and Laboratory Corporation of America Holdings (NYSE:LH) are both mid-cap medical companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, earnings, risk, dividends, profitability, institutional ownership and valuation.
Valuation and Earnings
This table compares Mednax and Laboratory Corporation of America Holdings’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Mednax||$3.34 billion||1.16||$628.40 million||$3.16||13.33|
|Laboratory Corporation of America Holdings||$9.67 billion||1.62||$1.86 billion||$7.12||21.65|
Laboratory Corporation of America Holdings has higher revenue and earnings than Mednax. Mednax is trading at a lower price-to-earnings ratio than Laboratory Corporation of America Holdings, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings and target prices for Mednax and Laboratory Corporation of America Holdings, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Laboratory Corporation of America Holdings||0||4||6||0||2.60|
Mednax currently has a consensus target price of $56.63, indicating a potential upside of 34.41%. Laboratory Corporation of America Holdings has a consensus target price of $165.10, indicating a potential upside of 7.10%. Given Mednax’s higher possible upside, research analysts clearly believe Mednax is more favorable than Laboratory Corporation of America Holdings.
Volatility and Risk
Mednax has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500. Comparatively, Laboratory Corporation of America Holdings has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500.
Institutional & Insider Ownership
93.2% of Laboratory Corporation of America Holdings shares are held by institutional investors. 2.4% of Mednax shares are held by insiders. Comparatively, 0.9% of Laboratory Corporation of America Holdings shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
This table compares Mednax and Laboratory Corporation of America Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Laboratory Corporation of America Holdings||7.57%||16.85%||6.55%|
Laboratory Corporation of America Holdings beats Mednax on 11 of the 14 factors compared between the two stocks.
Mednax Company Profile
MEDNAX, Inc. is a provider of physician services, including newborn, anesthesia, maternal-fetal, teleradiology, pediatric cardiology and other pediatric subspecialty care. As of December 31, 2016, the Company’s national network consisted of over 3,600 affiliated physicians, including over 1,130 physicians providing neonatal clinical care, in 35 states and Puerto Rico, primarily within hospital-based neonatal intensive care units (NICUs), to babies born prematurely or with medical complications. As of December 31, 2016, the Company had over 1,390 affiliated physicians providing anesthesia care to patients in connection with surgical and other procedures, as well as pain management. As of December 31, 2016, the Company had 270 affiliated physicians providing maternal-fetal and obstetrical medical care to expectant mothers experiencing complicated pregnancies primarily in areas where its affiliated neonatal physicians practice.
Laboratory Corporation of America Holdings Company Profile
Laboratory Corporation of America Holdings is a life sciences company that is integrated in guiding patient care, providing clinical laboratory and end-to-end drug development services. The Company operates as a healthcare diagnostics company. The Company operates through two segments: LabCorp Diagnostics (LCD) and Covance Drug Development (CDD). The LCD segment is an independent clinical laboratory business, which offers menu of frequently requested and specialty testing through an integrated network of primary and specialty laboratories across the United States. The CDD segment offers drug development services, and provides a range of drug research and development (R&D) and market access services to biopharmaceutical companies and medical device companies across the world. It serves a range of customers, including managed care organizations (MCOs), biopharmaceutical companies, governmental agencies, physicians and other healthcare providers.
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