Comparing Universal Health Services (NYSE:UHS) and Labcorp (NYSE:LH)

Labcorp (NYSE:LH) and Universal Health Services (NYSE:UHS) are both large-cap healthcare companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, analyst recommendations, valuation and profitability.

Analyst Ratings

This is a breakdown of current ratings and price targets for Labcorp and Universal Health Services, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Labcorp	0	3	7	1	2.82
Universal Health Services	0	12	6	0	2.33

Labcorp presently has a consensus target price of $337.73, indicating a potential upside of 2.66%. Universal Health Services has a consensus target price of $204.94, indicating a potential upside of 9.20%. Given Universal Health Services’ higher probable upside, analysts plainly believe Universal Health Services is more favorable than Labcorp.

Dividends

Labcorp pays an annual dividend of $2.88 per share and has a dividend yield of 0.9%. Universal Health Services pays an annual dividend of $0.80 per share and has a dividend yield of 0.4%. Labcorp pays out 23.8% of its earnings in the form of a dividend. Universal Health Services pays out 3.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Valuation and Earnings

This table compares Labcorp and Universal Health Services”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Labcorp	$13.95 billion	1.91	$876.50 million	$12.09	27.21
Universal Health Services	$17.36 billion	0.64	$1.49 billion	$24.55	7.64

Universal Health Services has higher revenue and earnings than Labcorp. Universal Health Services is trading at a lower price-to-earnings ratio than Labcorp, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Labcorp has a beta of 0.87, indicating that its stock price is 13% less volatile than the S&P 500. Comparatively, Universal Health Services has a beta of 1.03, indicating that its stock price is 3% more volatile than the S&P 500.

Profitability

This table compares Labcorp and Universal Health Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Labcorp	6.99%	16.74%	7.81%
Universal Health Services	8.42%	19.39%	9.21%

Insider and Institutional Ownership

95.9% of Labcorp shares are owned by institutional investors. Comparatively, 86.0% of Universal Health Services shares are owned by institutional investors. 0.8% of Labcorp shares are owned by insiders. Comparatively, 17.1% of Universal Health Services shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Universal Health Services beats Labcorp on 10 of the 17 factors compared between the two stocks.

About Labcorp

Labcorp Holdings, Inc. engages in providing medical testing services. The company was founded on April 16, 2024 and is headquartered in Burlington, NC.

About Universal Health Services

Universal Health Services, Inc., through its subsidiaries, owns and operates acute care hospitals, and outpatient and behavioral health care facilities. It operates through Acute Care Hospital Services and Behavioral Health Care Services segments. The company's hospitals offer general and specialty surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic and coronary care, pediatric services, pharmacy services, and/or behavioral health services. It also provides commercial health insurance services; and various management services, which include central purchasing, information, finance and control systems, facilities planning, physician recruitment, administrative personnel management, marketing, and public relations services. Universal Health Services, Inc. founded in 1978 and is headquartered in King of Prussia, Pennsylvania.