Kindred Healthcare (NYSE: KND) and Molina Healthcare (NYSE:MOH) are both medical companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, valuation, risk, profitability, analyst recommendations, earnings and institutional ownership.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Kindred Healthcare and Molina Healthcare, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Kindred Healthcare 3 4 1 0 1.75
Molina Healthcare 3 6 4 0 2.08

Kindred Healthcare currently has a consensus price target of $8.71, indicating a potential upside of 39.43%. Molina Healthcare has a consensus price target of $62.54, indicating a potential downside of 4.26%. Given Kindred Healthcare’s higher possible upside, equities research analysts plainly believe Kindred Healthcare is more favorable than Molina Healthcare.

Risk and Volatility

Kindred Healthcare has a beta of 1.26, suggesting that its stock price is 26% more 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.

Dividends

Kindred Healthcare pays an annual dividend of $0.24 per share and has a dividend yield of 3.8%. Molina Healthcare does not pay a dividend. Kindred Healthcare pays out -1.9% of its earnings in the form of a dividend.

Insider and Institutional Ownership

88.1% of Kindred Healthcare shares are owned by institutional investors. Comparatively, 96.0% of Molina Healthcare shares are owned by institutional investors. 3.0% of Kindred Healthcare shares are owned by company insiders. Comparatively, 6.2% of Molina Healthcare shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Kindred Healthcare and Molina Healthcare’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Kindred Healthcare $7.08 billion 0.08 $470.57 million ($12.82) -0.49
Molina Healthcare $18.51 billion 0.20 $106.00 million ($3.61) -18.09

Kindred Healthcare has higher revenue, but lower earnings than Molina Healthcare. Molina Healthcare is trading at a lower price-to-earnings ratio than Kindred Healthcare, indicating that it is currently the more affordable of the two stocks.

Profitability

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

Net Margins Return on Equity Return on Assets
Kindred Healthcare -16.31% 3.49% 0.53%
Molina Healthcare -1.07% 16.10% 3.35%

Summary

Molina Healthcare beats Kindred Healthcare on 10 of the 15 factors compared between the two stocks.

About Kindred Healthcare

Kindred Healthcare, Inc., incorporated on March 27, 1998, 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 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.

About Molina Healthcare

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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