UnitedHealth Group (NYSE: UNH) and Catamaran (NASDAQ:CTRX) are both large-cap medical companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, valuation, profitability, analyst recommendations, earnings, institutional ownership and dividends.

Profitability

This table compares UnitedHealth Group and Catamaran’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
UnitedHealth Group 4.50% 21.52% 6.99%
Catamaran 1.66% 6.54% 4.25%

Valuation & Earnings

This table compares UnitedHealth Group and Catamaran’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
UnitedHealth Group $184.83 billion 1.16 $7.02 billion $9.02 24.59
Catamaran N/A N/A N/A $1.64 37.48

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

Institutional & Insider Ownership

86.2% of UnitedHealth Group shares are held by institutional investors. 0.9% of UnitedHealth Group shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

UnitedHealth Group has a beta of 0.66, suggesting that its share price is 34% less volatile than the S&P 500. Comparatively, Catamaran has a beta of -0.18, suggesting that its share price is 118% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for UnitedHealth Group and Catamaran, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
UnitedHealth Group 0 0 22 0 3.00
Catamaran 0 0 0 0 N/A

UnitedHealth Group currently has a consensus price target of $227.19, suggesting a potential upside of 2.42%. Given UnitedHealth Group’s higher probable upside, research analysts clearly believe UnitedHealth Group is more favorable than Catamaran.

Dividends

UnitedHealth Group pays an annual dividend of $3.00 per share and has a dividend yield of 1.4%. Catamaran does not pay a dividend. UnitedHealth Group pays out 33.3% of its earnings in the form of a dividend. UnitedHealth Group has increased its dividend for 7 consecutive years.

Summary

UnitedHealth Group beats Catamaran on 12 of the 13 factors compared between the two stocks.

UnitedHealth Group Company Profile

UnitedHealth Group Incorporated is a health and well-being company. The Company operates through four segments: UnitedHealthcare, OptumHealth, OptumInsight and OptumRx. It conducts its operations through two business platforms: health benefits operating under UnitedHealthcare and health services operating under Optum. UnitedHealthcare provides healthcare benefits to an array of customers and markets, and includes UnitedHealthcare Employer & Individual, UnitedHealthcare Medicare & Retirement, UnitedHealthcare Community & State, and UnitedHealthcare Global businesses. Optum is a health services business serving the healthcare marketplace, including payers, care providers, employers, governments, life sciences companies and consumers, through its OptumHealth, OptumInsight and OptumRx businesses. OptumInsight provides services, technology and healthcare solutions to participants in the healthcare industry. OptumRx provides retail network contracting, purchasing and clinical solutions.

Catamaran Company Profile

Catamaran Corporation (Catamaran) is a provider of pharmacy benefit management (PBM) services and healthcare information technology (HCIT) solutions to the healthcare benefit management industry. The Company operates in two segments: PBM and HCIT. The Company offers PBM services, which are marketed under the Catamaran PBM brand, and is engaged in owning and operating a network of mail and specialty pharmacies. In addition, the Company is a national provider of drug benefits to its customers under the federal government’s Medicare Part D program. The Company’s HCIT product offerings include a range of software products for managing prescription drug programs and for drug prescribing and dispensing. The Company’s customers include organizations in the pharmaceutical supply chain, such as pharmacy benefit managers, managed care organizations, self-insured employer groups, unions, third-party healthcare plan administrators, and state and federal government entities.

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