Diplomat Pharmacy (NYSE: DPLO) and TeamHealth (NYSE:TMH) are both healthcare companies, but which is the superior business? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, risk, institutional ownership, valuation, dividends and earnings.

Analyst Recommendations

This is a summary of recent recommendations for Diplomat Pharmacy and TeamHealth, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Diplomat Pharmacy 0 4 4 0 2.50
TeamHealth 0 1 0 0 2.00

Diplomat Pharmacy presently has a consensus price target of $20.56, indicating a potential downside of 13.13%. TeamHealth has a consensus price target of $43.50, indicating a potential upside of 0.00%. Given TeamHealth’s higher probable upside, analysts plainly believe TeamHealth is more favorable than Diplomat Pharmacy.

Profitability

This table compares Diplomat Pharmacy and TeamHealth’s 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%
TeamHealth 0.92% 5.98% 0.99%

Institutional and Insider Ownership

72.2% of Diplomat Pharmacy shares are held by institutional investors. 30.2% of Diplomat Pharmacy shares are held by insiders. Comparatively, 1.3% of TeamHealth shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Diplomat Pharmacy and TeamHealth’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Diplomat Pharmacy $4.41 billion 0.37 $28.27 million $0.12 197.25
TeamHealth N/A N/A N/A $0.26 167.31

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

Summary

Diplomat Pharmacy beats TeamHealth on 8 of the 11 factors compared between the two stocks.

Diplomat Pharmacy Company Profile

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.

TeamHealth Company Profile

Team Health Holdings, Inc. is a United States-based physician services company. The Company supplies outsourced healthcare professional staffing and administrative services to hospitals and other healthcare providers in the United States. It operates through four segments: Hospital Based Services, IPC Healthcare, Specialty Services and Other Services. The Hospital Based Services segment provides healthcare service programs to users of healthcare services on a fee for service, and on a cost plus or contract basis. The IPC Healthcare segment provides acute hospital medicine and post-acute provider service programs to users of healthcare services. The Specialty Services segment provides healthcare service programs to users of healthcare services in an outpatient setting or in a non-hospital-based environment. The Other Services segment is an aggregation of locums staffing, scribes, and billing, collection and consulting services that provides a range of other healthcare services.

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