Contrasting McKesson (MCK) and Its Competitors

McKesson (NYSE:MCK) is one of 26 publicly-traded companies in the “MED/DENTAL – SUPP” industry, but how does it compare to its rivals? We will compare McKesson to related businesses based on the strength of its institutional ownership, analyst recommendations, risk, dividends, profitability, valuation and earnings.

Profitability

This table compares McKesson and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
McKesson	0.92%	-201.12%	5.83%
McKesson Competitors	2.88%	-3.91%	7.65%

Valuation & Earnings

This table compares McKesson and its rivals revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
McKesson	$359.05 billion	$3.30 billion	28.47
McKesson Competitors	$37.61 billion	$430.42 million	20.08

McKesson has higher revenue and earnings than its rivals. McKesson is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Volatility & Risk

McKesson has a beta of 0.48, suggesting that its stock price is 52% less volatile than the S&P 500. Comparatively, McKesson’s rivals have a beta of 0.52, suggesting that their average stock price is 48% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for McKesson and its rivals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
McKesson	0	3	10	1	2.86
McKesson Competitors	104	1128	2020	114	2.64

McKesson presently has a consensus price target of $696.42, indicating a potential downside of 5.30%. As a group, “MED/DENTAL – SUPP” companies have a potential upside of 24.76%. Given McKesson’s rivals higher possible upside, analysts clearly believe McKesson has less favorable growth aspects than its rivals.

Dividends

McKesson pays an annual dividend of $2.84 per share and has a dividend yield of 0.4%. McKesson pays out 11.0% of its earnings in the form of a dividend. As a group, “MED/DENTAL – SUPP” companies pay a dividend yield of 0.8% and pay out 26.3% of their earnings in the form of a dividend. McKesson has increased its dividend for 17 consecutive years.

Institutional & Insider Ownership

85.1% of McKesson shares are held by institutional investors. Comparatively, 69.6% of shares of all “MED/DENTAL – SUPP” companies are held by institutional investors. 0.1% of McKesson shares are held by insiders. Comparatively, 9.5% of shares of all “MED/DENTAL – SUPP” companies are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

McKesson beats its rivals on 8 of the 15 factors compared.

McKesson Company Profile

McKesson Corporation provides healthcare services in the United States and internationally. It operates through four segments: U.S. Pharmaceutical, Prescription Technology Solutions (RxTS), Medical-Surgical Solutions, and International. The U.S. Pharmaceutical segment distributes branded, generic, specialty, biosimilar and over-the-counter pharmaceutical drugs, and other healthcare-related products. This segment also offers practice management, technology, clinical support, and business solutions to community-based oncology and other specialty practices; and consulting, outsourcing, technological, and other services, as well as sells financial, operational, and clinical solutions to pharmacies. The RxTS segment serves biopharma and life sciences partners, and patients to address medication challenges for patients by working across healthcare; connects patients, pharmacies, providers, pharmacy benefit managers, health plans, and biopharma companies to deliver innovative solutions to help people get the medicine needed to live healthier lives; and provides prescription price transparency, benefit insight, dispensing support, third-party logistics, and wholesale distribution support services. The Medical-Surgical Solutions segment offers medical-surgical supply distribution, logistics, and other services to healthcare providers, including physician offices, surgery centers, nursing homes, hospital reference labs, and home health care agencies. The International segment provides distribution and services to wholesale, institutional, and retail customers in Europe and Canada. McKesson Corporation was founded in 1833 and is headquartered in Irving, Texas.