Financial Survey: WellCare Health Plans (WCG) vs. Molina Healthcare (MOH)

WellCare Health Plans (NYSE: WCG) and Molina Healthcare (NYSE:MOH) are both mid-cap medical companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, valuation, analyst recommendations, dividends and profitability.

Analyst Recommendations

This is a summary of current ratings for WellCare Health Plans and Molina Healthcare, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
WellCare Health Plans 0 10 7 0 2.41
Molina Healthcare 3 6 5 0 2.14

WellCare Health Plans currently has a consensus target price of $193.43, suggesting a potential downside of 2.41%. Molina Healthcare has a consensus target price of $64.71, suggesting a potential downside of 15.07%. Given WellCare Health Plans’ stronger consensus rating and higher probable upside, research analysts clearly believe WellCare Health Plans is more favorable than Molina Healthcare.

Valuation and Earnings

This table compares WellCare Health Plans and Molina Healthcare’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
WellCare Health Plans $14.24 billion 0.62 $242.10 million $7.97 24.87
Molina Healthcare $17.71 billion 0.25 $52.00 million ($5.27) -14.46

WellCare Health Plans has higher revenue, but lower earnings than Molina Healthcare. Molina Healthcare 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.

Institutional & Insider Ownership

98.2% of WellCare Health Plans shares are owned by institutional investors. Comparatively, 95.0% of Molina Healthcare shares are owned by institutional investors. 0.5% of WellCare Health Plans shares are owned by insiders. Comparatively, 6.2% of Molina Healthcare shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares WellCare Health Plans and Molina Healthcare’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
WellCare Health Plans 2.21% 19.42% 5.17%
Molina Healthcare -1.76% 17.76% 3.40%

Risk & Volatility

WellCare Health Plans has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500. Comparatively, Molina Healthcare has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500.

Summary

WellCare Health Plans beats Molina Healthcare on 10 of the 14 factors compared between the two stocks.

WellCare Health Plans Company Profile

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.

Molina Healthcare Company Profile

Molina Healthcare, Inc. offers Medicaid-related solutions for low-income families and individuals, and assists government agencies in their administration of the Medicaid program. The Company operates through three segments: Health Plans, Molina Medicaid Solutions and Other, which includes its Pathways Health and Community Support LLC (Pathways) business. It arranges healthcare services for persons served by Medicaid, Medicare, the Children’s Health Insurance Program (CHIP) and the Marketplace, and products to assist government agencies in their administration of the Medicaid program. As of December 31, 2016, the Company’s Health Plans segment consisted of health plans in 12 states and the Commonwealth of Puerto Rico, and its direct delivery business. The Molina Medicaid Solutions segment provides support to state government agencies in the administration of their Medicaid programs, including business processing, information technology development, and administrative services.

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