Catasys (NASDAQ: CATS) and Davita (NYSE:DVA) are both medical companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, dividends, analyst recommendations, earnings, institutional ownership and profitability.

Earnings and Valuation

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This table compares Catasys and Davita’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Catasys $7.72 million 10.00 -$13.60 million ($0.85) -5.71
Davita $10.88 billion 1.06 $663.61 million $3.32 19.03

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

Risk and Volatility

Catasys has a beta of 0.29, indicating that its share price is 71% less volatile than the S&P 500. Comparatively, Davita has a beta of 1.09, indicating that its share price is 9% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings for Catasys and Davita, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Catasys 0 1 1 0 2.50
Davita 1 4 4 2 2.64

Catasys presently has a consensus price target of $8.00, indicating a potential upside of 64.95%. Davita has a consensus price target of $79.00, indicating a potential upside of 25.06%. Given Catasys’ higher possible upside, analysts clearly believe Catasys is more favorable than Davita.

Insider and Institutional Ownership

4.7% of Catasys shares are owned by institutional investors. Comparatively, 85.8% of Davita shares are owned by institutional investors. 92.2% of Catasys shares are owned by company insiders. Comparatively, 2.0% of Davita shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Catasys and Davita’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Catasys -176.29% N/A -201.38%
Davita 4.65% 12.86% 3.43%

Summary

Davita beats Catasys on 11 of the 14 factors compared between the two stocks.

About Catasys

Catasys, Inc. provides data analytics based specialized behavioral health management and integrated treatment services to health plans and other third party payors. It offers OnTrak solution to improve treatment outcomes and lower the utilization of medical and behavioral health plan services. The company's OnTrak solution includes medical and psychosocial interventions; and a proprietary Web based clinical information platform and database, psychosocial programs, and integrated care coaching services. Its OnTrak solution combines medical and psychosocial treatments with elements of traditional disease management, case management, and ongoing member support to help organizations treat and manage populations struggling with substance dependence, depression, and anxiety to improve their health and thereby decrease their health care costs. Catasys, Inc.'s OnTrak solution includes various components, such as identification of impactable members, member engagement, enrollment/referral, provider network, outpatient medical treatment, outpatient psychosocial treatment, care coaching, monitoring and reporting, and proprietary Web-based clinical information platform. The company was formerly known as Hythiam, Inc. and changed its name to Catasys, Inc. in March 2011. Catasys, Inc. was founded in 2000 and is based in Los Angeles, California.

About Davita

DaVita Inc., formerly DaVita HealthCare Partners Inc., operates two divisions: DaVita Kidney Care (Kidney Care) and DaVita Medical Group (DMG). The Kidney Care division consists of its the United States dialysis and related lab services, its ancillary services and strategic initiatives, including its international operations, and its corporate administrative support. Its DMG division is a patient- and physician-focused integrated healthcare delivery and management company that provides medical services to members through capitation contracts. Its segments include U.S. dialysis and related lab services, DMG, and Other-Ancillary services and strategic initiatives. Its U.S. dialysis and related lab services line of business provide kidney dialysis services in the United States for patients suffering from chronic kidney failure, also known as end stage renal disease (ESRD). As of December 31, 2016, it had operated or provided administrative services to 154 outpatient dialysis centers.

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