DaVita HealthCare Partners (NYSE: DVA) and Laboratory Corporation of America Holdings (NYSE:LH) are both large-cap medical companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, profitabiliy, dividends, earnings and analyst recommendations.

Insider and Institutional Ownership

84.3% of DaVita HealthCare Partners shares are owned by institutional investors. Comparatively, 91.9% of Laboratory Corporation of America Holdings shares are owned by institutional investors. 2.1% of DaVita HealthCare Partners shares are owned by insiders. Comparatively, 0.9% of Laboratory Corporation of America Holdings shares are owned 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.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for DaVita HealthCare Partners and Laboratory Corporation of America Holdings, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DaVita HealthCare Partners 1 6 2 0 2.11
Laboratory Corporation of America Holdings 0 5 6 0 2.55

DaVita HealthCare Partners currently has a consensus price target of $67.88, suggesting a potential upside of 20.09%. Laboratory Corporation of America Holdings has a consensus price target of $158.91, suggesting a potential upside of 0.73%. Given DaVita HealthCare Partners’ higher probable upside, equities research analysts clearly believe DaVita HealthCare Partners is more favorable than Laboratory Corporation of America Holdings.

Valuation & Earnings

This table compares DaVita HealthCare Partners and Laboratory Corporation of America Holdings’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
DaVita HealthCare Partners $15.01 billion 0.72 $2.45 billion $6.50 8.70
Laboratory Corporation of America Holdings $9.67 billion 1.66 $1.86 billion $7.12 22.16

DaVita HealthCare Partners has higher revenue and earnings than Laboratory Corporation of America Holdings. DaVita HealthCare Partners is trading at a lower price-to-earnings ratio than Laboratory Corporation of America Holdings, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares DaVita HealthCare Partners and Laboratory Corporation of America Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
DaVita HealthCare Partners 8.68% 14.02% 3.78%
Laboratory Corporation of America Holdings 7.57% 16.85% 6.55%

Risk & Volatility

DaVita HealthCare Partners has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500. Comparatively, Laboratory Corporation of America Holdings has a beta of 0.94, indicating that its share price is 6% less volatile than the S&P 500.

Summary

Laboratory Corporation of America Holdings beats DaVita HealthCare Partners on 9 of the 14 factors compared between the two stocks.

DaVita HealthCare Partners Company Profile

DaVita Inc., formerly DaVita HealthCare Partners Inc., operates two divisions: DaVita Kidney Care (Kidney Care) and DaVita Medical Group (DMG). The Kidney Care division consists of its the United States dialysis and related lab services, its ancillary services and strategic initiatives, including its international operations, and its corporate administrative support. Its DMG division is a patient- and physician-focused integrated healthcare delivery and management company that provides medical services to members through capitation contracts. Its segments include U.S. dialysis and related lab services, DMG, and Other-Ancillary services and strategic initiatives. Its U.S. dialysis and related lab services line of business provide kidney dialysis services in the United States for patients suffering from chronic kidney failure, also known as end stage renal disease (ESRD). As of December 31, 2016, it had operated or provided administrative services to 154 outpatient dialysis centers.

Laboratory Corporation of America Holdings Company Profile

Laboratory Corporation of America Holdings is a life sciences company that is integrated in guiding patient care, providing clinical laboratory and end-to-end drug development services. The Company operates as a healthcare diagnostics company. The Company operates through two segments: LabCorp Diagnostics (LCD) and Covance Drug Development (CDD). The LCD segment is an independent clinical laboratory business, which offers menu of frequently requested and specialty testing through an integrated network of primary and specialty laboratories across the United States. The CDD segment offers drug development services, and provides a range of drug research and development (R&D) and market access services to biopharmaceutical companies and medical device companies across the world. It serves a range of customers, including managed care organizations (MCOs), biopharmaceutical companies, governmental agencies, physicians and other healthcare providers.

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