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

Profitability

This table compares Molina Healthcare and WellCare Health Plans’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Molina Healthcare -1.76% 17.76% 3.40%
WellCare Health Plans 2.21% 19.42% 5.17%

Insider & Institutional Ownership

98.0% of Molina Healthcare shares are held by institutional investors. Comparatively, 97.4% of WellCare Health Plans shares are held by institutional investors. 6.2% of Molina Healthcare shares are held by company insiders. Comparatively, 0.5% of WellCare Health Plans shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

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

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Molina Healthcare $17.71 billion 0.24 $52.00 million ($5.27) -14.24
WellCare Health Plans $14.24 billion 0.62 $242.10 million $7.97 25.00

WellCare Health Plans has higher revenue, but lower earnings than Molina Healthcare. Molina Healthcare 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.

Risk & Volatility

Molina Healthcare has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500. Comparatively, WellCare Health Plans has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Molina Healthcare and WellCare Health Plans, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Molina Healthcare 3 6 5 0 2.14
WellCare Health Plans 0 10 7 0 2.41

Molina Healthcare presently has a consensus price target of $64.71, indicating a potential downside of 13.76%. WellCare Health Plans has a consensus price target of $198.71, indicating a potential downside of 0.28%. Given WellCare Health Plans’ stronger consensus rating and higher probable upside, analysts clearly believe WellCare Health Plans is more favorable than Molina Healthcare.

Summary

WellCare Health Plans beats Molina Healthcare on 9 of the 14 factors compared between the two stocks.

About Molina Healthcare

Molina Healthcare, Inc. offers Medicaid-related solutions for low-income families and individuals, and assists government agencies in their administration of the Medicaid program. The Company operates through three segments: Health Plans, Molina Medicaid Solutions and Other, which includes its Pathways Health and Community Support LLC (Pathways) business. It arranges healthcare services for persons served by Medicaid, Medicare, the Children’s Health Insurance Program (CHIP) and the Marketplace, and products to assist government agencies in their administration of the Medicaid program. As of December 31, 2016, the Company’s Health Plans segment consisted of health plans in 12 states and the Commonwealth of Puerto Rico, and its direct delivery business. The Molina Medicaid Solutions segment provides support to state government agencies in the administration of their Medicaid programs, including business processing, information technology development, and administrative services.

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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