Reviewing Coventry Health Care (CVH) & UnitedHealth Group (UNH)

UnitedHealth Group (NYSE: UNH) and Coventry Health Care (NYSE:CVH) are both medical companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, profitability, institutional ownership, earnings, risk and analyst recommendations.

Valuation & Earnings

This table compares UnitedHealth Group and Coventry Health Care’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
UnitedHealth Group $184.83 billion 1.10 $7.02 billion $9.02 23.36
Coventry Health Care N/A N/A N/A $3.29 N/A

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

Dividends

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

Profitability

This table compares UnitedHealth Group and Coventry Health Care’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%
Coventry Health Care N/A N/A N/A

Analyst Ratings

This is a summary of recent recommendations and price targets for UnitedHealth Group and Coventry Health Care, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
UnitedHealth Group 0 0 22 0 3.00
Coventry Health Care 0 0 0 0 N/A

UnitedHealth Group currently has a consensus target price of $218.14, suggesting a potential upside of 3.53%.

Institutional and Insider Ownership

86.0% of UnitedHealth Group shares are owned by institutional investors. 0.9% of UnitedHealth Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Summary

UnitedHealth Group beats Coventry Health Care on 9 of the 11 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.

Coventry Health Care Company Profile

Coventry Health Care, Inc. (Coventry) is a diversified national managed healthcare company based in Bethesda, Maryland. Coventry operates health plans, insurance companies, network rental and workers’ compensation services companies. The Company operates in three segments: Health Plan and Medical Services, Specialized Managed Care, and Workers’ Compensation. On January 1, 2012 the Company completed its acquisition of Children’s Mercy’s Family Health Partners, a Medicaid health plan. In May 2013, Aetna Inc announced it has completed its acquisition of Coventry Health Care, Inc.

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