Humana (NYSE: HUM) and Catamaran Corp (NASDAQ:SXCI) are both medical companies, but which is the better investment? We will contrast the two companies based on the strength of their profitabiliy, dividends, institutional ownership, earnings, risk, analyst recommendations and valuation.

Dividends

Humana pays an annual dividend of $1.60 per share and has a dividend yield of 0.6%. Catamaran Corp does not pay a dividend. Humana pays out 13.1% of its earnings in the form of a dividend. Catamaran Corp has increased its dividend for 6 consecutive years.

Analyst Recommendations

This is a summary of current ratings and target prices for Humana and Catamaran Corp, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Humana 0 7 12 0 2.63
Catamaran Corp 0 0 0 0 N/A

Humana currently has a consensus target price of $242.67, suggesting a potential downside of 2.79%. Given Humana’s higher probable upside, equities analysts clearly believe Humana is more favorable than Catamaran Corp.

Institutional and Insider Ownership

99.7% of Humana shares are held by institutional investors. 0.8% of Humana shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Humana and Catamaran Corp’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Humana $53.87 billion 0.67 $2.66 billion $12.25 20.38
Catamaran Corp N/A N/A N/A N/A N/A

Humana has higher revenue and earnings than Catamaran Corp.

Profitability

This table compares Humana and Catamaran Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Humana 3.37% 15.85% 5.76%
Catamaran Corp 1.66% 6.54% 4.25%

Summary

Humana beats Catamaran Corp on 9 of the 11 factors compared between the two stocks.

About Humana

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.

About Catamaran Corp

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.

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