Critical Analysis: Catamaran (CTRX) versus Humana (HUM)
Catamaran (NASDAQ: CTRX) and Humana (NYSE:HUM) are both large-cap managed health care – nec companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, profitability, dividends, valuation, analyst recommendations and institutional ownership.
Institutional & Insider Ownership
94.0% of Humana shares are owned by institutional investors. 0.8% of Humana shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
This table compares Catamaran and Humana’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Humana pays an annual dividend of $1.60 per share and has a dividend yield of 0.6%. Catamaran does not pay a dividend. Humana pays out 12.6% of its earnings in the form of a dividend. Catamaran has increased its dividend for 7 consecutive years.
This is a summary of recent recommendations for Catamaran and Humana, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Humana has a consensus price target of $258.61, suggesting a potential downside of 4.28%. Given Humana’s higher probable upside, analysts clearly believe Humana is more favorable than Catamaran.
Risk and Volatility
Catamaran has a beta of -0.18, suggesting that its share price is 118% less volatile than the S&P 500. Comparatively, Humana has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500.
Earnings and Valuation
This table compares Catamaran and Humana’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Humana||$54.38 billion||0.71||$614.00 million||$12.70||21.27|
Humana has higher revenue and earnings than Catamaran. Humana is trading at a lower price-to-earnings ratio than Catamaran, indicating that it is currently the more affordable of the two stocks.
Humana beats Catamaran on 11 of the 14 factors compared between the two stocks.
Catamaran Corporation (Catamaran) is a provider of pharmacy benefit management (PBM) services and healthcare information technology (HCIT) solutions to the healthcare benefit management industry. The Company operates in two segments: PBM and HCIT. The Company offers PBM services, which are marketed under the Catamaran PBM brand, and is engaged in owning and operating a network of mail and specialty pharmacies. In addition, the Company is a national provider of drug benefits to its customers under the federal government’s Medicare Part D program. The Company’s HCIT product offerings include a range of software products for managing prescription drug programs and for drug prescribing and dispensing. The Company’s customers include organizations in the pharmaceutical supply chain, such as pharmacy benefit managers, managed care organizations, self-insured employer groups, unions, third-party healthcare plan administrators, and state and federal government entities.
Humana Inc. is a health and well-being company. The Company’s segments include Retail, Group and Specialty, Healthcare Services and Individual Commercial. The Retail segment consists of Medicare benefits, as well as individual commercial fully insured medical and specialty health insurance benefits, including dental, vision, and other supplemental health and financial protection products. The Group and Specialty segment consists of employer group commercial fully insured medical and specialty health insurance benefits, including dental, vision, and other supplemental health. The Healthcare Services segment includes services offered to its health plan members, as well as to third parties, including pharmacy solutions, provider services, home-based services and clinical programs, as well as services and capabilities to manage population health. The Individual Commercial segment includes Individual Commercial products marketed under the HumanaOne brand.
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