Laboratory Corporation of America Holdings (NYSE: LH) and Kindred Healthcare (NYSE:KND) are both medical companies, but which is the better stock? We will compare the two companies based on the strength of their risk, institutional ownership, analyst recommendations, earnings, dividends, valuation and profitability.

Valuation and Earnings

This table compares Laboratory Corporation of America Holdings and Kindred Healthcare’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Laboratory Corporation of America Holdings $9.67 billion 1.62 $1.86 billion $7.12 21.62
Kindred Healthcare $7.08 billion 0.09 $470.57 million ($12.82) -0.60

Laboratory Corporation of America Holdings has higher revenue and earnings than Kindred Healthcare. Kindred Healthcare 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 Laboratory Corporation of America Holdings and Kindred Healthcare’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Laboratory Corporation of America Holdings 7.57% 16.85% 6.55%
Kindred Healthcare -16.31% 3.49% 0.53%

Dividends

Kindred Healthcare pays an annual dividend of $0.24 per share and has a dividend yield of 3.1%. Laboratory Corporation of America Holdings does not pay a dividend. Kindred Healthcare pays out -1.9% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Laboratory Corporation of America Holdings and Kindred Healthcare, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Laboratory Corporation of America Holdings 0 5 6 0 2.55
Kindred Healthcare 2 3 2 0 2.00

Laboratory Corporation of America Holdings currently has a consensus price target of $160.36, suggesting a potential upside of 4.19%. Kindred Healthcare has a consensus price target of $9.67, suggesting a potential upside of 25.54%. Given Kindred Healthcare’s higher probable upside, analysts clearly believe Kindred Healthcare is more favorable than Laboratory Corporation of America Holdings.

Volatility and Risk

Laboratory Corporation of America Holdings has a beta of 0.94, indicating that its stock price is 6% less volatile than the S&P 500. Comparatively, Kindred Healthcare has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500.

Institutional and Insider Ownership

91.6% of Laboratory Corporation of America Holdings shares are owned by institutional investors. Comparatively, 89.8% of Kindred Healthcare shares are owned by institutional investors. 0.9% of Laboratory Corporation of America Holdings shares are owned by company insiders. Comparatively, 3.0% of Kindred Healthcare shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Laboratory Corporation of America Holdings beats Kindred Healthcare on 10 of the 16 factors compared between the two stocks.

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.

Kindred Healthcare Company Profile

Kindred Healthcare, Inc. is a healthcare services company. The Company, through its subsidiaries, operates transitional care (TC) hospitals, a home health, hospice and community care business, inpatient rehabilitation hospitals (IRFs), a contract rehabilitation services business, nursing centers and assisted living facilities across the United States. The Company operates through four divisions: the Kindred at Home division, the hospital division, the Kindred Rehabilitation Services division and the nursing center division. These divisions represent six segments: home health services, hospice services, hospitals, Kindred Hospital Rehabilitation Services, RehabCare and nursing centers. The home health services and hospice services operating segments are contained within the Kindred at Home division while the Kindred Hospital Rehabilitation Services and RehabCare operating segments are both contained within the Kindred Rehabilitation Services division.

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