Head-To-Head Comparison: MEDNAX (MD) vs. Magellan Health (MGLN)

MEDNAX (NYSE: MD) and Magellan Health (NASDAQ:MGLN) are both mid-cap medical companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, earnings, risk, analyst recommendations, valuation and institutional ownership.

Profitability

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This table compares MEDNAX and Magellan Health’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MEDNAX 9.26% 10.10% 5.23%
Magellan Health 1.89% 10.86% 4.91%

Institutional and Insider Ownership

98.5% of MEDNAX shares are owned by institutional investors. Comparatively, 96.1% of Magellan Health shares are owned by institutional investors. 2.7% of MEDNAX shares are owned by company insiders. Comparatively, 4.6% of Magellan Health shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings and Valuation

This table compares MEDNAX and Magellan Health’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MEDNAX $3.46 billion 1.42 $320.37 million $3.15 16.67
Magellan Health $5.84 billion 0.47 $110.20 million $5.50 20.10

MEDNAX has higher earnings, but lower revenue than Magellan Health. MEDNAX is trading at a lower price-to-earnings ratio than Magellan Health, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations and price targets for MEDNAX and Magellan Health, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MEDNAX 1 9 3 0 2.15
Magellan Health 0 1 3 0 2.75

MEDNAX currently has a consensus price target of $55.33, indicating a potential upside of 5.38%. Magellan Health has a consensus price target of $90.67, indicating a potential downside of 17.99%. Given MEDNAX’s higher probable upside, analysts plainly believe MEDNAX is more favorable than Magellan Health.

Risk & Volatility

MEDNAX has a beta of 0.23, suggesting that its stock price is 77% less volatile than the S&P 500. Comparatively, Magellan Health has a beta of 0.5, suggesting that its stock price is 50% less volatile than the S&P 500.

Summary

Magellan Health beats MEDNAX on 7 of the 13 factors compared between the two stocks.

About MEDNAX

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.

About Magellan Health

Magellan Health, Inc. provides healthcare management services in the United States. It operates in Healthcare and Pharmacy Management segments. The Healthcare segment offers carve-out management services for behavioral health; employee assistance plans (EAP); and other areas of specialty healthcare, including diagnostic imaging, musculoskeletal management, cardiac, and physical medicine for health plans, care organizations, and employers. It also contracts with local, state, and federal governmental agencies to provide services to recipients under Medicaid, Medicare, and other government programs, such as behavioral health and EAP, as well as healthcare management and long term support services through its network of medical and behavioral health professionals, clinics, hospitals, nursing facilities, home care agencies, and ancillary service providers. The Pharmacy Management segment comprises products and solutions that provide clinical and financial management of pharmaceuticals paid under medical and pharmacy benefit programs. This segment offers pharmacy benefit management services, pharmacy benefit administration for state Medicaid and other government sponsored programs, pharmaceutical dispensing services, clinical and formulary management programs, medical pharmacy management programs, and programs for the integrated management of specialty drugs that treat complex conditions. The company provides services to health plans and other managed care organizations, employers, labor unions, various military and governmental agencies, and third party administrators. Magellan Health, Inc. was founded in 1969 and is headquartered in Scottsdale, Arizona.

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