Head-To-Head Review: Cerner (CERN) & CSRA (CSRA)

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

Earnings and Valuation

This table compares Cerner and CSRA’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cerner $5.14 billion 4.17 $866.97 million $2.20 29.63
CSRA $4.99 billion 1.35 $304.00 million $1.91 21.59

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

Dividends

CSRA pays an annual dividend of $0.40 per share and has a dividend yield of 1.0%. Cerner does not pay a dividend. CSRA pays out 20.9% of its earnings in the form of a dividend.

Volatility & Risk

Cerner has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500. Comparatively, CSRA has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500.

Insider & Institutional Ownership

78.3% of Cerner shares are held by institutional investors. Comparatively, 94.3% of CSRA shares are held by institutional investors. 4.7% of Cerner shares are held by insiders. Comparatively, 0.4% of CSRA shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Cerner and CSRA’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cerner 16.06% 15.26% 11.34%
CSRA 7.46% 68.98% 6.50%

Analyst Ratings

This is a breakdown of recent recommendations for Cerner and CSRA, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cerner 0 6 11 0 2.65
CSRA 1 8 1 0 2.00

Cerner currently has a consensus target price of $71.74, indicating a potential upside of 10.07%. CSRA has a consensus target price of $37.47, indicating a potential downside of 9.12%. Given Cerner’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Cerner is more favorable than CSRA.

Summary

Cerner beats CSRA on 13 of the 16 factors compared between the two stocks.

About Cerner

Cerner Corporation provides health care information technology solutions and services in the United States and internationally. The company offers Cerner Millennium architecture, a person-centric computing framework, which includes clinical, financial, and management information systems that allow providers to access an individual's electronic health record (EHR) at the point of care, and organizes and delivers information for physicians, nurses, laboratory technicians, pharmacists, front- and back-office professionals, and consumers. It also provides HealtheIntent platform, a cloud-based platform that enables organizations to aggregate, transform, and reconcile data across the continuum of care, as well as EHR agnostic platform, CareAware, that facilitates connectivity of health care devices to EHRs. In addition, the company offers a portfolio of clinical and financial health care information technology solutions, as well as departmental, connectivity, population health, and care coordination solutions; and various complementary services, including support, hosting, managed, implementation, and strategic consulting services. Further, it provides various services, such as implementation and training, remote hosting, operational management, revenue cycle, support and maintenance, health care data analysis, clinical process optimization, transaction processing, employer health centers, employee wellness programs, and third party administrator services for employer-based health plans; and complementary hardware and devices for third parties. It serves integrated delivery networks, physician groups and networks, managed care organizations, hospitals, medical centers, reference laboratories, home health agencies, blood banks, imaging centers, pharmacies, pharmaceutical manufacturers, employers, governments, and public health organizations. Cerner Corporation was founded in 1979 and is headquartered in North Kansas City, Missouri.

About CSRA

CSRA Inc. is a provider of information technology services to the United States federal government. The Company operates through two segments: Defense and Intelligence, and Civil. The Defense and Intelligence segment provides services to the Department of Defense (DoD), National Security Agency, branches of the Armed Forces, and other DoD and Intelligence agencies. The Civil segment provides services to various federal agencies within the Department of Homeland Security (the DHS), Department of Health and Human services, and other federal civil agencies, as well as various state and local government agencies. It supplies civil government agencies with mission information systems and associated technical support services. It provides its customers with technical services across service areas, including Digital Services, Enterprise Business Services, Digital Platforms, Cyber, Data Science, and Professional and Citizen Services. It has conducted operations in over 130 locations.

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