HeadHead Contrast: Magellan Health (MGLN) & Mednax (MD)

Magellan Health (NASDAQ: MGLN) and Mednax (NYSE:MD) are both mid-cap medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, dividends, institutional ownership, risk, profitability, analyst recommendations and earnings.

Analyst Ratings

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This is a summary of recent ratings and target prices for Magellan Health and Mednax, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Magellan Health 0 1 3 0 2.75
Mednax 1 9 3 0 2.15

Magellan Health presently has a consensus price target of $90.67, suggesting a potential downside of 17.73%. Mednax has a consensus price target of $55.33, suggesting a potential upside of 8.43%. Given Mednax’s higher possible upside, analysts plainly believe Mednax is more favorable than Magellan Health.

Valuation and Earnings

This table compares Magellan Health and Mednax’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Magellan Health $5.84 billion 0.46 $110.20 million $5.50 20.04
Mednax $3.46 billion 1.38 $320.37 million $3.15 16.20

Mednax has lower revenue, but higher earnings than Magellan Health. Mednax is trading at a lower price-to-earnings ratio than Magellan Health, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

96.1% of Magellan Health shares are held by institutional investors. Comparatively, 98.5% of Mednax shares are held by institutional investors. 4.6% of Magellan Health shares are held by company insiders. Comparatively, 2.4% of Mednax shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Magellan Health and Mednax’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Magellan Health 1.89% 10.86% 4.91%
Mednax 9.26% 10.10% 5.23%

Volatility & Risk

Magellan Health has a beta of 0.5, indicating that its stock price is 50% less volatile than the S&P 500. Comparatively, Mednax has a beta of 0.23, indicating that its stock price is 77% less volatile than the S&P 500.

Summary

Magellan Health beats Mednax on 7 of the 13 factors compared between the two stocks.

Magellan Health Company Profile

Magellan Health, Inc. provides healthcare management services in the United States. It operates in Healthcare and Pharmacy Management segments. The Healthcare segment offers carve-out management services for behavioral health; employee assistance plans (EAP); and other areas of specialty healthcare, including diagnostic imaging, musculoskeletal management, cardiac, and physical medicine for health plans, care organizations, and employers. It also contracts with local, state, and federal governmental agencies to provide services to recipients under Medicaid, Medicare, and other government programs, such as behavioral health and EAP, as well as healthcare management and long term support services through its network of medical and behavioral health professionals, clinics, hospitals, nursing facilities, home care agencies, and ancillary service providers. The Pharmacy Management segment comprises products and solutions that provide clinical and financial management of pharmaceuticals paid under medical and pharmacy benefit programs. This segment offers pharmacy benefit management services, pharmacy benefit administration for state Medicaid and other government sponsored programs, pharmaceutical dispensing services, clinical and formulary management programs, medical pharmacy management programs, and programs for the integrated management of specialty drugs that treat complex conditions. The company provides services to health plans and other managed care organizations, employers, labor unions, various military and governmental agencies, and third party administrators. Magellan Health, Inc. was founded in 1969 and is headquartered in Scottsdale, Arizona.

Mednax Company Profile

MEDNAX, Inc., together with its subsidiaries, provides newborn, anesthesia, maternal-fetal, radiology, pediatric cardiology, and other pediatric subspecialties physician services in the United States and Puerto Rico. It offers neonatal care services, such as clinical care to babies born prematurely or with complications within specific units at hospitals through neonatal physician subspecialists, neonatal nurse practitioners, and other pediatric clinicians; anesthesia and anesthesia subspecialty care; and acute and chronic pain management services. The company also provides maternal-fetal care, including inpatient and office-based clinical care to expectant mothers and their unborn babies through maternal-fetal medicine subspecialists, as well as obstetricians and other clinicians consisting of maternal-fetal nurse practitioners, certified nurse mid-wives, ultrasonographers, and genetic counselors. In addition, its pediatric cardiology care services comprise inpatient and office-based pediatric cardiology care of the fetus, infant, child, and adolescent patient with congenital heart defects and acquired heart disease, as well as adults with congenital heart defects through pediatric cardiologist subspecialists and other related clinical professionals. Further, the company provides other pediatric subspecialty care services through pediatric subspecialists, such as pediatric intensivists, pediatric hospitalists, and pediatric surgeons, as well as pediatric ear, nose, and throat physicians; and support services in the areas of hospitals, primarily in the pediatric emergency rooms, labor and delivery areas, and nursery and pediatric departments. Additionally, it provides radiology and teleradiology services. As of December 31, 2017, the company's network consisted of approximately 4,075 affiliated physicians. MEDNAX, Inc. was founded in 1979 and is based in Sunrise, Florida.