Financial Survey: HCA Healthcare (HCA) vs. Davita (DVA)

HCA Healthcare (NYSE: HCA) and Davita (NYSE:DVA) are both large-cap healthcare companies, but which is the better investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, valuation, institutional ownership, profitability and analyst recommendations.

Insider and Institutional Ownership

74.1% of HCA Healthcare shares are held by institutional investors. Comparatively, 82.9% of Davita shares are held by institutional investors. 2.9% of HCA Healthcare shares are held by insiders. Comparatively, 2.0% of Davita shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and target prices for HCA Healthcare and Davita, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HCA Healthcare 2 5 16 0 2.61
Davita 1 4 4 2 2.64

HCA Healthcare currently has a consensus price target of $104.05, suggesting a potential upside of 3.69%. Davita has a consensus price target of $79.00, suggesting a potential upside of 8.89%. Given Davita’s stronger consensus rating and higher probable upside, analysts plainly believe Davita is more favorable than HCA Healthcare.

Earnings & Valuation

This table compares HCA Healthcare and Davita’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
HCA Healthcare $47.65 billion 0.74 $2.22 billion $5.11 19.64
Davita $10.88 billion 1.22 $663.61 million $4.85 14.96

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

Volatility & Risk

HCA Healthcare has a beta of 0.48, indicating that its share price is 52% less volatile than the S&P 500. Comparatively, Davita has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500.

Profitability

This table compares HCA Healthcare and Davita’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HCA Healthcare 4.89% -49.49% 7.21%
Davita 4.65% 12.86% 3.43%

Summary

HCA Healthcare beats Davita on 8 of the 15 factors compared between the two stocks.

About HCA Healthcare

HCA Healthcare, Inc., formerly HCA Holdings, Inc., is a holding company. The Company, through its subsidiaries, owns and operates hospitals and related healthcare entities. As of December 31, 2016, the Company operated in two geographically organized groups, including the National and American Groups. As of December 31, 2016, the National Group included 84 hospitals, which were located in Alaska, California, Florida, southern Georgia, Idaho, Indiana, northern Kentucky, Nevada, New Hampshire, South Carolina, Utah and Virginia. As of December 31, 2016, the American Group included 80 hospitals, which were located in Colorado, northern Georgia, Kansas, southern Kentucky, Louisiana, Mississippi, Missouri, Oklahoma, Tennessee and Texas. As of December 31, 2016, the Company operated six hospitals in England. The Company owns, manages or operates hospitals, freestanding surgery centers and freestanding emergency care facilities, walk-in clinics, diagnostic and imaging centers, among others.

About Davita

DaVita Inc., formerly DaVita HealthCare Partners Inc., operates two divisions: DaVita Kidney Care (Kidney Care) and DaVita Medical Group (DMG). The Kidney Care division consists of its the United States dialysis and related lab services, its ancillary services and strategic initiatives, including its international operations, and its corporate administrative support. Its DMG division is a patient- and physician-focused integrated healthcare delivery and management company that provides medical services to members through capitation contracts. Its segments include U.S. dialysis and related lab services, DMG, and Other-Ancillary services and strategic initiatives. Its U.S. dialysis and related lab services line of business provide kidney dialysis services in the United States for patients suffering from chronic kidney failure, also known as end stage renal disease (ESRD). As of December 31, 2016, it had operated or provided administrative services to 154 outpatient dialysis centers.

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