Critical Analysis: Magellan Health (MGLN) vs. Anthem (ANTM)
Magellan Health (NASDAQ: MGLN) and Anthem (NYSE:ANTM) are both mid-cap medical companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, institutional ownership, profitability and risk.
Risk & Volatility
Magellan Health has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500. Comparatively, Anthem has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500.
Earnings and Valuation
This table compares Magellan Health and Anthem’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Magellan Health||$5.28 billion||0.38||$242.58 million||$3.53||23.77|
|Anthem||$88.03 billion||0.55||$5.75 billion||$10.56||17.41|
Anthem has higher revenue and earnings than Magellan Health. Anthem is trading at a lower price-to-earnings ratio than Magellan Health, indicating that it is currently the more affordable of the two stocks.
This table compares Magellan Health and Anthem’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional & Insider Ownership
93.6% of Magellan Health shares are owned by institutional investors. Comparatively, 87.7% of Anthem shares are owned by institutional investors. 3.6% of Magellan Health shares are owned by company insiders. Comparatively, 0.4% of Anthem shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
Anthem pays an annual dividend of $2.80 per share and has a dividend yield of 1.5%. Magellan Health does not pay a dividend. Anthem pays out 26.5% of its earnings in the form of a dividend. Anthem has increased its dividend for 2 consecutive years.
This is a summary of current ratings for Magellan Health and Anthem, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Magellan Health currently has a consensus price target of $81.25, indicating a potential downside of 3.16%. Anthem has a consensus price target of $186.63, indicating a potential upside of 1.52%. Given Anthem’s stronger consensus rating and higher probable upside, analysts plainly believe Anthem is more favorable than Magellan Health.
Anthem beats Magellan Health on 13 of the 17 factors compared between the two stocks.
About Magellan Health
Magellan Health, Inc. is engaged in the healthcare management business. The Company’s segments include Healthcare, Pharmacy Management and Corporate. It is focused on managing special populations, complete pharmacy benefits and other specialty areas of healthcare. Its Healthcare includes its management of behavioral healthcare services and employee assistance program (EAP) services, management of other specialty areas, including diagnostic imaging and musculoskeletal management, and the integrated management of physical, behavioral and pharmaceutical healthcare for special populations, delivered through Magellan Complete Care (MCC). Its Pharmacy Management segment consists of products and solutions that provide clinical and financial management of pharmaceuticals paid under medical and pharmacy benefit programs. Its Corporate segment consists primarily of operational support functions. It provides services to health plans and other managed care organizations (MCOs).
Anthem, Inc. is a health benefits company. The Company operates through three segments: Commercial and Specialty Business, Government Business and Other. It offers a spectrum of network-based managed care plans to large and small employer, individual, Medicaid and Medicare markets. Its managed care plans include preferred provider organizations; health maintenance organizations; point-of-service plans; indemnity plans and other hybrid plans, including consumer-driven health plans; and hospital only and limited benefit products. It also provides an array of managed care services to self-funded customers, including claims processing, underwriting, stop loss insurance, actuarial services, provider network access, medical cost management, disease management, wellness programs and other administrative services. It provides an array of specialty and other insurance products and services, such as dental, vision, life and disability insurance benefits and radiology benefit management.
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