Analyzing McKesson (NYSE:MCK) and PACS Group (NYSE:PACS)

PACS Group (NYSE:PACS) and McKesson (NYSE:MCK) are both healthcare companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, valuation, dividends, analyst recommendations, institutional ownership and profitability.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for PACS Group and McKesson, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
PACS Group	0	1	7	0	2.88
McKesson	0	4	15	0	2.79

PACS Group currently has a consensus price target of $61.33, suggesting a potential upside of 23.45%. McKesson has a consensus price target of $1,026.18, suggesting a potential downside of 3.26%. Given PACS Group’s stronger consensus rating and higher probable upside, equities research analysts clearly believe PACS Group is more favorable than McKesson.

Insider and Institutional Ownership

85.1% of McKesson shares are owned by institutional investors. 70.1% of PACS Group shares are owned by insiders. Comparatively, 0.1% of McKesson shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Risk and Volatility

PACS Group has a beta of -0.14, suggesting that its stock price is 114% less volatile than the S&P 500. Comparatively, McKesson has a beta of 0.27, suggesting that its stock price is 73% less volatile than the S&P 500.

Valuation and Earnings

This table compares PACS Group and McKesson”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
PACS Group	$5.29 billion	1.49	$191.54 million	$1.77	28.07
McKesson	$403.43 billion	0.31	$4.76 billion	$38.89	27.28

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

Profitability

This table compares PACS Group and McKesson’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
PACS Group	4.85%	29.55%	5.23%
McKesson	1.12%	-253.21%	5.90%

About PACS Group

PACS Group, Inc., through its subsidiaries, operates skilled nursing facilities and assisted living facilities in the United States. The company also provides senior care and independent facilities. It engages in the acquisition, ownership, and leasing of health care-related properties. The company was founded in 2013 and is based in Farmington, Utah.

About McKesson

McKesson Corporation provides healthcare services in the United States and internationally. It operates through four segments: U.S. Pharmaceutical, Prescription Technology Solutions (RxTS), Medical-Surgical Solutions, and International. The U.S. Pharmaceutical segment distributes branded, generic, specialty, biosimilar and over-the-counter pharmaceutical drugs, and other healthcare-related products. This segment also offers practice management, technology, clinical support, and business solutions to community-based oncology and other specialty practices; and consulting, outsourcing, technological, and other services, as well as sells financial, operational, and clinical solutions to pharmacies. The RxTS segment serves biopharma and life sciences partners, and patients to address medication challenges for patients by working across healthcare; connects patients, pharmacies, providers, pharmacy benefit managers, health plans, and biopharma companies to deliver innovative solutions to help people get the medicine needed to live healthier lives; and provides prescription price transparency, benefit insight, dispensing support, third-party logistics, and wholesale distribution support services. The Medical-Surgical Solutions segment offers medical-surgical supply distribution, logistics, and other services to healthcare providers, including physician offices, surgery centers, nursing homes, hospital reference labs, and home health care agencies. The International segment provides distribution and services to wholesale, institutional, and retail customers in Europe and Canada. McKesson Corporation was founded in 1833 and is headquartered in Irving, Texas.