Molina Healthcare (NYSE: MOH) and HealthStream (NASDAQ:HSTM) are both medical companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, valuation, risk, analyst recommendations, institutional ownership, earnings and profitabiliy.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Molina Healthcare and HealthStream, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Molina Healthcare 4 5 3 0 1.92
HealthStream 0 3 4 0 2.57

Molina Healthcare presently has a consensus price target of $60.00, indicating a potential upside of 2.41%. HealthStream has a consensus price target of $26.00, indicating a potential upside of 11.64%. Given HealthStream’s stronger consensus rating and higher probable upside, analysts clearly believe HealthStream is more favorable than Molina Healthcare.

Valuation & Earnings

This table compares Molina Healthcare and HealthStream’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Molina Healthcare $18.51 billion 0.18 $106.00 million ($3.61) -16.23
HealthStream $238.45 million 3.11 $23.61 million $0.14 166.36

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

Volatility & Risk

Molina Healthcare has a beta of 0.89, meaning that its share price is 11% less volatile than the S&P 500. Comparatively, HealthStream has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500.

Insider & Institutional Ownership

93.4% of Molina Healthcare shares are held by institutional investors. Comparatively, 76.8% of HealthStream shares are held by institutional investors. 6.2% of Molina Healthcare shares are held by insiders. Comparatively, 21.1% of HealthStream shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Molina Healthcare and HealthStream’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Molina Healthcare -1.07% 16.10% 3.35%
HealthStream 1.85% 2.27% 1.65%

Summary

HealthStream beats Molina Healthcare on 9 of the 14 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.

HealthStream Company Profile

HealthStream, Inc. (HealthStream) provides workforce, patient experience and provider solutions for healthcare organizations. The Company operates in three segments: HealthStream Workforce Solutions, HealthStream Patient Experience Solutions and HealthStream Provider Solutions. HealthStream’s products and services are organized into three segments: Workforce Solutions, Patient Experience Solutions, and Provider Solutions. HealthStream’s solutions are provided to a range of customers within the healthcare industry across the continuum of care. Delivered primarily as Software-as-a-Service (SaaS), the Company’s solutions focus on challenges facing the healthcare workforce and healthcare organizations, including the need to manage, retain, engage and develop healthcare workforce talent; meet compliance requirements; manage ongoing medical staff credentialing and privileging processes, and deliver patient experiences of care in healthcare organizations.

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