HCA Healthcare (NYSE: HCA) and Davita (NYSE:DVA) are both large-cap healthcare companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, earnings, profitability, institutional ownership, valuation and risk.
Insider and Institutional Ownership
73.5% of HCA Healthcare shares are held by institutional investors. Comparatively, 85.8% of Davita shares are held by institutional investors. 2.9% of HCA Healthcare shares are held by insiders. Comparatively, 2.0% of Davita shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Valuation & Earnings
This table compares HCA Healthcare and Davita’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|HCA Healthcare||$47.65 billion||0.75||$2.22 billion||$6.77||15.06|
|Davita||$10.88 billion||1.17||$663.61 million||$4.75||14.74|
HCA Healthcare has higher revenue and earnings than Davita. Davita is trading at a lower price-to-earnings ratio than HCA Healthcare, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
HCA Healthcare has a beta of 0.49, suggesting that its stock price is 51% less volatile than the S&P 500. Comparatively, Davita has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500.
HCA Healthcare pays an annual dividend of $1.40 per share and has a dividend yield of 1.4%. Davita does not pay a dividend. HCA Healthcare pays out 20.7% of its earnings in the form of a dividend.
This table compares HCA Healthcare and Davita’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of recent ratings and recommmendations for HCA Healthcare and Davita, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
HCA Healthcare presently has a consensus target price of $104.05, suggesting a potential upside of 2.08%. Davita has a consensus target price of $79.00, suggesting a potential upside of 12.81%. Given Davita’s stronger consensus rating and higher probable upside, analysts clearly believe Davita is more favorable than HCA Healthcare.
HCA Healthcare beats Davita on 9 of the 17 factors compared between the two stocks.
HCA Healthcare Company Profile
HCA Healthcare, Inc., formerly HCA Holdings, Inc., is a holding company. The Company, through its subsidiaries, owns and operates hospitals and related healthcare entities. As of December 31, 2016, the Company operated in two geographically organized groups, including the National and American Groups. As of December 31, 2016, the National Group included 84 hospitals, which were located in Alaska, California, Florida, southern Georgia, Idaho, Indiana, northern Kentucky, Nevada, New Hampshire, South Carolina, Utah and Virginia. As of December 31, 2016, the American Group included 80 hospitals, which were located in Colorado, northern Georgia, Kansas, southern Kentucky, Louisiana, Mississippi, Missouri, Oklahoma, Tennessee and Texas. As of December 31, 2016, the Company operated six hospitals in England. The Company owns, manages or operates hospitals, freestanding surgery centers and freestanding emergency care facilities, walk-in clinics, diagnostic and imaging centers, among others.
Davita Company Profile
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.
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