Pharmerica Corporation (NYSE: PMC) and Cardinal Health (NYSE:CAH) are both medical companies, but which is the superior stock? We will compare the two companies based on the strength of their profitabiliy, valuation, risk, analyst recommendations, earnings, dividends and institutional ownership.
Cardinal Health pays an annual dividend of $1.85 per share and has a dividend yield of 2.4%. Pharmerica Corporation does not pay a dividend. Cardinal Health pays out 44.0% of its earnings in the form of a dividend. Pharmerica Corporation has increased its dividend for 12 consecutive years.
This table compares Pharmerica Corporation and Cardinal Health’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of current recommendations for Pharmerica Corporation and Cardinal Health, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Cardinal Health has a consensus price target of $83.46, suggesting a potential upside of 7.46%. Given Cardinal Health’s higher probable upside, analysts clearly believe Cardinal Health is more favorable than Pharmerica Corporation.
Volatility and Risk
Pharmerica Corporation has a beta of 0.93, suggesting that its share price is 7% less volatile than the S&P 500. Comparatively, Cardinal Health has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500.
Insider & Institutional Ownership
92.7% of Pharmerica Corporation shares are owned by institutional investors. Comparatively, 87.6% of Cardinal Health shares are owned by institutional investors. 5.0% of Pharmerica Corporation shares are owned by company insiders. Comparatively, 0.9% of Cardinal Health shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Earnings and Valuation
This table compares Pharmerica Corporation and Cardinal Health’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Pharmerica Corporation||$2.13 billion||0.38||$130.20 million||$0.67||38.81|
|Cardinal Health||$128.39 billion||0.19||$3.10 billion||$4.20||18.49|
Cardinal Health has higher revenue and earnings than Pharmerica Corporation. Cardinal Health is trading at a lower price-to-earnings ratio than Pharmerica Corporation, indicating that it is currently the more affordable of the two stocks.
Cardinal Health beats Pharmerica Corporation on 10 of the 16 factors compared between the two stocks.
About Pharmerica Corporation
PharMerica Corporation is an institutional pharmacy services company. The Company services healthcare facilities, provides pharmacy management services to hospitals and specialty infusion services to patients outside a hospital setting, and offers the national oncology pharmacy in the United States. Its segments include institutional pharmacy, which provides pharmacy products and services to residents and patients in skilled nursing facilities, nursing centers, assisted living facilities, hospitals and other long-term alternative care settings; specialty infusion services, which provides specialty infusion services focused on providing pharmaceutical products and clinical services to patients in client facilities, hospice and outside of hospital or nursing home settings, and specialty oncology pharmacy, which provides dispensing of oncology drugs, care management and other related services to patients, oncology practices and hospitals.
About Cardinal Health
Cardinal Health, Inc. is a healthcare services and products company. The Company operates through two segments: Pharmaceutical and Medical. The Pharmaceutical segment distributes branded and generic pharmaceutical, specialty pharmaceutical, over-the-counter healthcare and consumer products. This segment also operates nuclear pharmacies and cyclotron facilities; provides pharmacy management services to hospitals, as well as medication therapy management and patient outcomes services to hospitals, other healthcare providers and payers, and provides services to healthcare companies. The Medical segment distributes a range of medical, surgical and laboratory products, and provides services to hospitals, ambulatory surgery centers, clinical laboratories and other healthcare providers. This segment also manufactures, sources and develops its own Cardinal Health brand medical and surgical products. It provides post-acute care management and transition services, and software to hospitals.
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