Diplomat Pharmacy (NYSE: DPLO) and The Providence Service (NASDAQ:PRSC) are both small-cap retail/wholesale companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.
This table compares Diplomat Pharmacy and The Providence Service’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|The Providence Service||2.58%||7.53%||3.24%|
Institutional and Insider Ownership
64.6% of Diplomat Pharmacy shares are held by institutional investors. Comparatively, 97.7% of The Providence Service shares are held by institutional investors. 30.2% of Diplomat Pharmacy shares are held by insiders. Comparatively, 18.9% of The Providence Service shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
This is a summary of current ratings and target prices for Diplomat Pharmacy and The Providence Service, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|The Providence Service||0||0||1||0||3.00|
Diplomat Pharmacy presently has a consensus price target of $25.50, indicating a potential upside of 9.91%. The Providence Service has a consensus price target of $67.00, indicating a potential downside of 3.90%. Given Diplomat Pharmacy’s higher probable upside, analysts clearly believe Diplomat Pharmacy is more favorable than The Providence Service.
Valuation and Earnings
This table compares Diplomat Pharmacy and The Providence Service’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Diplomat Pharmacy||$4.49 billion||0.38||$15.51 million||$0.21||110.48|
|The Providence Service||$1.62 billion||0.55||$53.36 million||$3.07||22.71|
The Providence Service has lower revenue, but higher earnings than Diplomat Pharmacy. The Providence Service is trading at a lower price-to-earnings ratio than Diplomat Pharmacy, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Diplomat Pharmacy has a beta of 1.32, suggesting that its share price is 32% more volatile than the S&P 500. Comparatively, The Providence Service has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500.
Diplomat Pharmacy Company Profile
Diplomat Pharmacy, Inc. (Diplomat) operates a specialty pharmacy business, which stocks, dispenses and distributes prescriptions for various biotechnology and specialty pharmaceutical manufacturers. The Company operates through specialty pharmacy services segment. The Company’s primary focus is on medication management programs for individuals with chronic diseases, including oncology, immunology, hepatitis, multiple sclerosis, specialty infusion therapy, and various other serious and/or long-term conditions. The Company provides specialty pharmacy support services to a national network of retailers and independent pharmacy groups, hospitals and health systems. The Company offers various services, such as specialty drug dispensing, retail specialty services, hospital and health system services, and hub services. The Company’s patient care system is used to coordinate and track patient adherence and safety.
The Providence Service Company Profile
The Providence Service Corporation (Providence) is a holding company. The Company, through its subsidiaries, is engaged in the provision of healthcare and workforce development services for public and private sector entities. The Company’s segments include Non-Emergency Transportation Services (NET Services), Workforce Development Services (WD Services) and Matrix Investment. NET Services segment includes nationwide provider of non-emergency medical transportation programs for state governments and managed care organizations. WD Services segment is a global provider of employment preparation and placement and legal offender rehabilitation services to eligible participants of government sponsored programs. Matrix Investment segment includes minority interest in nationwide provider of in-home care optimization and management solutions, including comprehensive health assessments (CHAs), to members of managed care organizations, accounted for as an equity method investment.
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