WellCare Health Plans (NYSE: WCG) and Universal American (NYSE:UAM) are both medical companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, institutional ownership, dividends, profitabiliy, analyst recommendations, earnings and valuation.
Insider and Institutional Ownership
98.7% of WellCare Health Plans shares are owned by institutional investors. Comparatively, 85.7% of Universal American shares are owned by institutional investors. 0.5% of WellCare Health Plans shares are owned by insiders. Comparatively, 7.7% of Universal American shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.
Earnings and Valuation
This table compares WellCare Health Plans and Universal American’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|WellCare Health Plans||$14.65 billion||0.53||$656.20 million||$5.69||30.43|
WellCare Health Plans has higher revenue and earnings than Universal American. Universal American 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.
This is a breakdown of current ratings for WellCare Health Plans and Universal American, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|WellCare Health Plans||0||10||3||0||2.23|
WellCare Health Plans presently has a consensus target price of $169.90, indicating a potential downside of 1.86%. Universal American has a consensus target price of $10.00, indicating a potential upside of 0.30%. Given Universal American’s higher possible upside, analysts plainly believe Universal American is more favorable than WellCare Health Plans.
This table compares WellCare Health Plans and Universal American’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|WellCare Health Plans||1.66%||14.91%||4.12%|
Risk and Volatility
WellCare Health Plans has a beta of 0.84, meaning that its share price is 16% less volatile than the S&P 500. Comparatively, Universal American has a beta of 1.74, meaning that its share price is 74% more volatile than the S&P 500.
WellCare Health Plans beats Universal American on 8 of the 11 factors compared between the two stocks.
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.
About Universal American
Universal American Corp. provides an array of health insurance and managed care products and services to people covered by Medicare. The Company’s segments include Medicare Advantage, Management Services Organization (MSO), and Corporate & Other. The Medicare Advantage segment contains the operations of its initiatives in managed care for seniors. It operated 16 Medicare Shared Saving Program Accountable Care Organizations (ACOs) and two Next Generation ACOs, which included approximately 5,200 participating providers with approximately 221,800 assigned Medicare fee-for-service beneficiaries, as of December 31, 2016. The MSO segment supports its physician partnerships in the development of healthcare models, such as ACOs, with a range of capabilities and resources, including technology, analytics, clinical care coordination, regulatory compliance and program administration. It has developed a primary care physician alignment strategy, which is branded as The Healthy Collaboration.
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