Head-To-Head Comparison: Catasys (CATS) & DaVita (DVA)

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

Insider & Institutional Ownership

5.0% of Catasys shares are held by institutional investors. Comparatively, 89.2% of DaVita shares are held by institutional investors. 92.2% of Catasys shares are held by insiders. Comparatively, 2.1% of DaVita shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets 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, suggesting a potential upside of 54.14%. DaVita has a consensus price target of $79.00, suggesting a potential upside of 16.90%. Given Catasys’ higher probable upside, research analysts clearly believe Catasys is more favorable than DaVita.

Valuation & Earnings

This table compares Catasys and DaVita’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Catasys $7.72 million 10.70 -$13.60 million ($0.85) -6.11
DaVita $10.88 billion 1.08 $663.61 million $3.32 20.36

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.

Volatility and Risk

Catasys has a beta of 0.26, indicating that its share price is 74% less volatile than the S&P 500. Comparatively, DaVita has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500.

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 50.55% -374.49% -148.00%
DaVita 2.94% 13.84% 3.61%

Summary

DaVita beats Catasys on 11 of the 15 factors compared between the two stocks.

Catasys Company Profile

Catasys, Inc. provides big data predictive analytics, artificial intelligence and telehealth, combined with human intervention 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.

DaVita Company Profile

DaVita Inc. provides kidney dialysis services for patients suffering from chronic kidney failure or end stage renal disease (ESRD). The company operates kidney dialysis centers and provides related lab services in outpatient dialysis centers. It also provides outpatient, hospital inpatient, and home-based hemodialysis services; owns clinical laboratories that provide routine laboratory tests for dialysis and other physician-prescribed laboratory tests for ESRD patients; and management and administrative services to outpatient dialysis centers. In addition, the company operates DaVita Rx, a pharmacy that provides oral medications and medication management services to patients with ESRD; disease management services; vascular access services; clinical research programs; physician services; and direct primary care services. As of December 31, 2017, it provided dialysis and administrative services in the United States through a network of 2,510 outpatient dialysis centers serving approximately 197,800 patients; and operated 237 outpatient dialysis centers located in 11 countries outside of the United States. Further, the company provides acute inpatient dialysis services in approximately 900 hospitals and related laboratory services in the United States. The company was formerly known as DaVita HealthCare Partners Inc. and changed its name to DaVita Inc. in September 2016. DaVita Inc. was founded in 1994 and is headquartered in Denver, Colorado.

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