WellCare Health Plans (NYSE: WCG) and Centene Corporation (NYSE:CNC) are both mid-cap medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, institutional ownership, earnings and profitability.

Profitability

This table compares WellCare Health Plans and Centene Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
WellCare Health Plans 1.66% 14.91% 4.12%
Centene Corporation 1.72% 14.62% 4.24%

Analyst Ratings

This is a summary of current ratings and price targets for WellCare Health Plans and Centene Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
WellCare Health Plans 0 9 6 0 2.40
Centene Corporation 1 4 12 0 2.65

WellCare Health Plans currently has a consensus price target of $178.31, indicating a potential upside of 5.94%. Centene Corporation has a consensus price target of $93.38, indicating a potential downside of 0.33%. Given WellCare Health Plans’ higher probable upside, analysts clearly believe WellCare Health Plans is more favorable than Centene Corporation.

Institutional and Insider Ownership

97.8% of WellCare Health Plans shares are owned by institutional investors. Comparatively, 92.4% of Centene Corporation shares are owned by institutional investors. 0.5% of WellCare Health Plans shares are owned by company insiders. Comparatively, 3.0% of Centene Corporation shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares WellCare Health Plans and Centene Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
WellCare Health Plans $15.36 billion 0.49 $623.20 million $5.69 29.58
Centene Corporation $43.65 billion 0.37 $2.19 billion $4.55 20.59

Centene Corporation has higher revenue and earnings than WellCare Health Plans. Centene Corporation is trading at a lower price-to-earnings ratio than WellCare Health Plans, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

WellCare Health Plans has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500. Comparatively, Centene Corporation has a beta of 0.68, suggesting that its stock price is 32% less volatile than the S&P 500.

About WellCare Health Plans

WellCare Health Plans, Inc. is a managed care company. The Company focuses on government-sponsored managed care services, primarily through Medicaid, Medicare Advantage (MA) and Medicare Prescription Drug Plans (PDPs), to families, children, seniors and individuals with medical needs. The Company operates through three segments: Medicaid Health Plans, Medicare Health Plans and Medicare PDPs. As of December 31, 2016, it served approximately 3.9 million members in 50 states and the District of Columbia. As of December 31, 2016, it operated Medicaid health plans in Arizona, Florida, Georgia, Hawaii, Illinois, Kentucky, Missouri, New Jersey, New York and South Carolina. As of December 31, 2016, it offered MA coordinated care plans (CCPs) in certain counties in Arizona, Arkansas, California, Connecticut, Florida, Georgia, Hawaii, Illinois, Kentucky, Louisiana, Mississippi, New Jersey, New York, South Carolina, Tennessee and Texas.

About Centene Corporation

Centene Corporation is a healthcare company. The Company provides a portfolio of services to government sponsored healthcare programs, focusing on under-insured and uninsured individuals. The Company operates through two segments: Managed Care and Specialty Services. The Company’s Managed Care segment provides health plan coverage to individuals, through government subsidized programs, including Medicaid, the State Children’s Health Insurance Program (CHIP), Long Term Care, Foster Care, dual-eligible individuals (Duals) and the Supplemental Security Income Program, also known as the Aged, Blind or Disabled Program (ABD), Medicare, and Health Insurance Marketplace. Its Specialty Services segment consists of its specialty companies offering a range of healthcare services and products to state programs, correctional facilities, healthcare organizations, employer groups and other commercial organizations, as well as to its own subsidiaries.

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