UnitedHealth Group (NYSE:UNH) & Addus HomeCare (NASDAQ:ADUS) Financial Analysis

Addus HomeCare (NASDAQ:ADUS) and UnitedHealth Group (NYSE:UNH) are both healthcare companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, valuation, profitability, institutional ownership, analyst recommendations, dividends and risk.

Volatility and Risk

Addus HomeCare has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500. Comparatively, UnitedHealth Group has a beta of 0.51, meaning that its stock price is 49% less volatile than the S&P 500.

Profitability

This table compares Addus HomeCare and UnitedHealth Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Addus HomeCare	7.13%	9.96%	7.62%
UnitedHealth Group	3.53%	17.95%	5.95%

Insider & Institutional Ownership

95.3% of Addus HomeCare shares are owned by institutional investors. Comparatively, 87.9% of UnitedHealth Group shares are owned by institutional investors. 4.1% of Addus HomeCare shares are owned by insiders. Comparatively, 0.2% of UnitedHealth Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings for Addus HomeCare and UnitedHealth Group, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Addus HomeCare	1	4	5	1	2.55
UnitedHealth Group	0	8	20	0	2.71

Addus HomeCare currently has a consensus target price of $129.33, indicating a potential upside of 1.81%. UnitedHealth Group has a consensus target price of $463.93, indicating a potential upside of 15.52%. Given UnitedHealth Group’s stronger consensus rating and higher possible upside, analysts plainly believe UnitedHealth Group is more favorable than Addus HomeCare.

Earnings and Valuation

This table compares Addus HomeCare and UnitedHealth Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Addus HomeCare	$1.48 billion	1.61	$95.91 million	$5.70	22.29
UnitedHealth Group	$447.57 billion	0.81	$12.06 billion	$17.51	22.93

UnitedHealth Group has higher revenue and earnings than Addus HomeCare. Addus HomeCare is trading at a lower price-to-earnings ratio than UnitedHealth Group, indicating that it is currently the more affordable of the two stocks.

Summary

UnitedHealth Group beats Addus HomeCare on 8 of the 15 factors compared between the two stocks.

About Addus HomeCare

Addus HomeCare Corporation, together with its subsidiaries, provides personal care services to elderly, chronically ill, disabled persons, and individuals who are at risk of hospitalization or institutionalization in the United States. The company operates through three segments: Personal Care, Hospice, and Home Health. The Personal Care segment provides non-medical assistance with activities of daily living. This segment offers services that include assistance with bathing, grooming, oral care, feeding and dressing, medication reminders, meal planning and preparation, housekeeping, and transportation services. The Hospice segment provides palliative nursing care, social work, spiritual counseling, homemaker, and bereavement counseling services for people who are terminally ill, as well as related services for their families. The Home Health segment offers skilled nursing and physical, occupational, and speech therapy for the individuals who requires assistance during an illness or after hospitalization. The company's payor clients include federal, state, and local governmental agencies; managed care organizations; commercial insurers; and private individuals. Addus HomeCare Corporation was founded in 1979 and is headquartered in Frisco, Texas.

About UnitedHealth Group

UnitedHealth Group Incorporated operates as a diversified health care company in the United States. The company operates through four segments: UnitedHealthcare, Optum Health, Optum Insight, and Optum Rx. The UnitedHealthcare segment offers consumer-oriented health benefit plans and services for national employers, public sector employers, mid-sized employers, small businesses, and individuals; health care coverage, and health and well-being services to individuals age 50 and older addressing their needs; Medicaid plans, children's health insurance and health care programs; and health and dental benefits, and hospital and clinical services, as well as health care benefits products and services to state programs caring for the economically disadvantaged, medically underserved, and those without the benefit of employer-funded health care coverage. The Optum Health segment provides care delivery, care management, wellness and consumer engagement, and health financial services patients, consumers, care delivery systems, providers, employers, payers, and public-sector entities. The Optum Insight segment offers software and information products, advisory consulting arrangements, and managed services outsourcing contracts to hospital systems, physicians, health plans, governments, life sciences companies, and other organizations. The Optum Rx segment provides pharmacy care services and programs, including retail network contracting, home delivery, specialty and community health pharmacy services, infusion, and purchasing and clinical capabilities, as well as develops programs in the areas of step therapy, formulary management, drug adherence, and disease/drug therapy management. UnitedHealth Group Incorporated was founded in 1974 and is based in Minnetonka, Minnesota.