Diplomat Pharmacy (NYSE: DPLO) and HCA Holdings (NYSE:HCA) are both retail/wholesale companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, analyst recommendations, risk, earnings and profitability.

Earnings and Valuation

This table compares Diplomat Pharmacy and HCA Holdings’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Diplomat Pharmacy $4.41 billion 0.23 $28.27 million $0.10 146.30
HCA Holdings $41.49 billion 0.65 $2.89 billion $7.03 10.81

HCA Holdings has higher revenue and earnings than Diplomat Pharmacy. HCA Holdings is trading at a lower price-to-earnings ratio than Diplomat Pharmacy, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Diplomat Pharmacy has a beta of 0.74, suggesting that its share price is 26% less volatile than the S&P 500. Comparatively, HCA Holdings has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500.

Insider & Institutional Ownership

66.5% of Diplomat Pharmacy shares are held by institutional investors. Comparatively, 75.9% of HCA Holdings shares are held by institutional investors. 30.2% of Diplomat Pharmacy shares are held by insiders. Comparatively, 2.9% of HCA Holdings shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Diplomat Pharmacy and HCA Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Diplomat Pharmacy 0.18% 8.30% 4.70%
HCA Holdings 6.13% -47.16% 7.23%

Analyst Recommendations

This is a summary of recent ratings and price targets for Diplomat Pharmacy and HCA Holdings, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Diplomat Pharmacy 1 5 2 0 2.13
HCA Holdings 0 4 16 0 2.80

Diplomat Pharmacy presently has a consensus price target of $18.81, indicating a potential upside of 28.59%. HCA Holdings has a consensus price target of $89.84, indicating a potential upside of 18.26%. Given Diplomat Pharmacy’s higher probable upside, equities research analysts plainly believe Diplomat Pharmacy is more favorable than HCA Holdings.

Summary

HCA Holdings beats Diplomat Pharmacy on 9 of the 14 factors compared between the two stocks.

About Diplomat Pharmacy

Diplomat Pharmacy, Inc. (Diplomat) operates a specialty pharmacy business, which stocks, dispenses and distributes prescriptions for various biotechnology and specialty pharmaceutical manufacturers. The Company operates through specialty pharmacy services segment. The Company’s primary focus is on medication management programs for individuals with chronic diseases, including oncology, immunology, hepatitis, multiple sclerosis, specialty infusion therapy, and various other serious and/or long-term conditions. The Company provides specialty pharmacy support services to a national network of retailers and independent pharmacy groups, hospitals and health systems. The Company offers various services, such as specialty drug dispensing, retail specialty services, hospital and health system services, and hub services. The Company’s patient care system is used to coordinate and track patient adherence and safety.

About HCA Holdings

HCA Healthcare, Inc., formerly HCA Holdings, Inc., is a holding company. The Company, through its subsidiaries, owns and operates hospitals and related healthcare entities. As of December 31, 2016, the Company operated in two geographically organized groups, including the National and American Groups. As of December 31, 2016, the National Group included 84 hospitals, which were located in Alaska, California, Florida, southern Georgia, Idaho, Indiana, northern Kentucky, Nevada, New Hampshire, South Carolina, Utah and Virginia. As of December 31, 2016, the American Group included 80 hospitals, which were located in Colorado, northern Georgia, Kansas, southern Kentucky, Louisiana, Mississippi, Missouri, Oklahoma, Tennessee and Texas. As of December 31, 2016, the Company operated six hospitals in England. The Company owns, manages or operates hospitals, freestanding surgery centers and freestanding emergency care facilities, walk-in clinics, diagnostic and imaging centers, among others.

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