Contrasting Labcorp (NYSE:LH) and HCA Healthcare (NYSE:HCA)

HCA Healthcare (NYSE:HCA) and Labcorp (NYSE:LH) are both large-cap healthcare companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, earnings, risk, dividends, valuation, analyst recommendations and profitability.

Risk and Volatility

HCA Healthcare has a beta of 1.1, suggesting that its stock price is 10% more volatile than the S&P 500. Comparatively, Labcorp has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500.

Earnings and Valuation

This table compares HCA Healthcare and Labcorp”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HCA Healthcare	$75.60 billion	1.22	$6.78 billion	$29.87	14.29
Labcorp	$13.95 billion	1.87	$876.50 million	$12.09	26.57

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

Dividends

HCA Healthcare pays an annual dividend of $3.12 per share and has a dividend yield of 0.7%. Labcorp pays an annual dividend of $2.88 per share and has a dividend yield of 0.9%. HCA Healthcare pays out 10.4% of its earnings in the form of a dividend. Labcorp pays out 23.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. HCA Healthcare has increased its dividend for 6 consecutive years.

Institutional & Insider Ownership

62.7% of HCA Healthcare shares are held by institutional investors. Comparatively, 95.9% of Labcorp shares are held by institutional investors. 1.5% of HCA Healthcare shares are held by insiders. Comparatively, 0.8% of Labcorp shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares HCA Healthcare and Labcorp’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HCA Healthcare	8.77%	-244.79%	11.10%
Labcorp	6.99%	16.74%	7.81%

Analyst Ratings

This is a breakdown of recent recommendations for HCA Healthcare and Labcorp, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HCA Healthcare	1	8	14	0	2.57
Labcorp	0	3	9	0	2.75

HCA Healthcare currently has a consensus price target of $462.27, suggesting a potential upside of 8.28%. Labcorp has a consensus price target of $337.73, suggesting a potential upside of 5.12%. Given HCA Healthcare’s higher possible upside, equities analysts clearly believe HCA Healthcare is more favorable than Labcorp.

Summary

HCA Healthcare beats Labcorp on 11 of the 17 factors compared between the two stocks.

About HCA Healthcare

HCA Healthcare, Inc., through its subsidiaries, owns and operates hospitals and related healthcare entities in the United States. It operates general and acute care hospitals that offers medical and surgical services, including inpatient care, intensive care, cardiac care, diagnostic, and emergency services; and outpatient services, such as outpatient surgery, laboratory, radiology, respiratory therapy, cardiology, and physical therapy. The company also operates outpatient health care facilities consisting of freestanding ambulatory surgery centers, freestanding emergency care facilities, urgent care facilities, walk-in clinics, diagnostic and imaging centers, rehabilitation and physical therapy centers, radiation and oncology therapy centers, physician practices, and various other facilities. In addition, it operates behavioral hospitals, which provide therapeutic programs comprising child, adolescent and adult psychiatric care, adolescent and adult alcohol, drug abuse treatment, and counseling services. The company was formerly known as HCA Holdings, Inc. HCA Healthcare, Inc. was founded in 1968 and is headquartered in Nashville, Tennessee.

About Labcorp

Labcorp Holdings, Inc. engages in providing medical testing services. The company was founded on April 16, 2024 and is headquartered in Burlington, NC.