Aetna (NYSE: AET) and Catamaran (NASDAQ:CTRX) are both large-cap medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, valuation, dividends, earnings, risk, analyst recommendations and institutional ownership.
Insider and Institutional Ownership
88.0% of Aetna shares are owned by institutional investors. 1.1% of Aetna shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
This table compares Aetna and Catamaran’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Aetna||$63.16 billion||0.92||$2.27 billion||$5.40||33.09|
Aetna has higher revenue and earnings than Catamaran. Aetna is trading at a lower price-to-earnings ratio than Catamaran, indicating that it is currently the more affordable of the two stocks.
Aetna pays an annual dividend of $2.00 per share and has a dividend yield of 1.1%. Catamaran does not pay a dividend. Aetna pays out 37.0% of its earnings in the form of a dividend.
Risk and Volatility
Aetna has a beta of 0.61, suggesting that its share price is 39% less volatile than the S&P 500. Comparatively, Catamaran has a beta of -0.18, suggesting that its share price is 118% less volatile than the S&P 500.
This is a summary of recent ratings and recommmendations for Aetna and Catamaran, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Aetna currently has a consensus target price of $177.47, suggesting a potential downside of 0.69%. Given Aetna’s higher probable upside, research analysts clearly believe Aetna is more favorable than Catamaran.
This table compares Aetna and Catamaran’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Aetna beats Catamaran on 11 of the 12 factors compared between the two stocks.
Aetna Inc. is a diversified healthcare benefits company. The Company operates through three segments: Health Care, Group Insurance and Large Case Pensions. It offers a range of traditional, voluntary and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life and disability plans, medical management capabilities, Medicaid healthcare management services, Medicare Advantage and Medicare Supplement plans, workers’ compensation administrative services and health information technology (HIT) products and services. The Health Care segment consists of medical, pharmacy benefit management services, dental, behavioral health and vision plans offered on both an Insured basis and an employer-funded basis, and emerging businesses products and services. The Group Insurance segment includes group life insurance and group disability products. Its products are offered on an Insured basis.
Catamaran Corporation (Catamaran) is a provider of pharmacy benefit management (PBM) services and healthcare information technology (HCIT) solutions to the healthcare benefit management industry. The Company operates in two segments: PBM and HCIT. The Company offers PBM services, which are marketed under the Catamaran PBM brand, and is engaged in owning and operating a network of mail and specialty pharmacies. In addition, the Company is a national provider of drug benefits to its customers under the federal government’s Medicare Part D program. The Company’s HCIT product offerings include a range of software products for managing prescription drug programs and for drug prescribing and dispensing. The Company’s customers include organizations in the pharmaceutical supply chain, such as pharmacy benefit managers, managed care organizations, self-insured employer groups, unions, third-party healthcare plan administrators, and state and federal government entities.
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