Critical Comparison: Molina Healthcare (MOH) & UnitedHealth Group (UNH)
Molina Healthcare (NYSE: MOH) and UnitedHealth Group (NYSE:UNH) are both mid-cap medical companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, risk, dividends, earnings, institutional ownership, analyst recommendations and valuation.
Earnings & Valuation
This table compares Molina Healthcare and UnitedHealth Group’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Molina Healthcare||$18.51 billion||0.19||$106.00 million||($3.61)||-17.05|
|UnitedHealth Group||$192.60 billion||1.02||$15.57 billion||$8.54||23.87|
UnitedHealth Group has higher revenue and earnings than Molina Healthcare. Molina Healthcare is trading at a lower price-to-earnings ratio than UnitedHealth Group, indicating that it is currently the more affordable of the two stocks.
UnitedHealth Group pays an annual dividend of $3.00 per share and has a dividend yield of 1.5%. Molina Healthcare does not pay a dividend. UnitedHealth Group pays out 35.1% of its earnings in the form of a dividend. Molina Healthcare has raised its dividend for 7 consecutive years.
This is a summary of current recommendations and price targets for Molina Healthcare and UnitedHealth Group, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Molina Healthcare currently has a consensus target price of $62.50, suggesting a potential upside of 1.56%. UnitedHealth Group has a consensus target price of $213.29, suggesting a potential upside of 4.61%. Given UnitedHealth Group’s stronger consensus rating and higher possible upside, analysts plainly believe UnitedHealth Group is more favorable than Molina Healthcare.
This table compares Molina Healthcare and UnitedHealth Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Insider and Institutional Ownership
96.0% of Molina Healthcare shares are owned by institutional investors. Comparatively, 86.1% of UnitedHealth Group shares are owned by institutional investors. 6.2% of Molina Healthcare shares are owned by company insiders. Comparatively, 0.9% of UnitedHealth Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Risk & Volatility
Molina Healthcare has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500. Comparatively, UnitedHealth Group has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500.
UnitedHealth Group beats Molina Healthcare on 12 of the 17 factors compared between the two stocks.
Molina Healthcare Company Profile
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.
UnitedHealth Group Company Profile
UnitedHealth Group Incorporated is a health and well-being company. The Company operates through four segments: UnitedHealthcare, OptumHealth, OptumInsight and OptumRx. It conducts its operations through two business platforms: health benefits operating under UnitedHealthcare and health services operating under Optum. UnitedHealthcare provides healthcare benefits to an array of customers and markets, and includes UnitedHealthcare Employer & Individual, UnitedHealthcare Medicare & Retirement, UnitedHealthcare Community & State, and UnitedHealthcare Global businesses. Optum is a health services business serving the healthcare marketplace, including payers, care providers, employers, governments, life sciences companies and consumers, through its OptumHealth, OptumInsight and OptumRx businesses. OptumInsight provides services, technology and healthcare solutions to participants in the healthcare industry. OptumRx provides retail network contracting, purchasing and clinical solutions.
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