Laboratory Co. of America (NYSE:LH) and The Providence Service (NASDAQ:PRSC) are both medical companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, valuation, profitability, earnings, risk, institutional ownership and analyst recommendations.
Analyst Recommendations
This is a breakdown of current ratings and price targets for Laboratory Co. of America and The Providence Service, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Laboratory Co. of America | 0 | 1 | 14 | 0 | 2.93 |
| The Providence Service | 0 | 0 | 3 | 0 | 3.00 |
Laboratory Co. of America presently has a consensus price target of $235.4667, suggesting a potential downside of 3.27%. The Providence Service has a consensus price target of $152.00, suggesting a potential upside of 4.12%. Given The Providence Service's stronger consensus rating and higher possible upside, analysts clearly believe The Providence Service is more favorable than Laboratory Co. of America.
Profitability
This table compares Laboratory Co. of America and The Providence Service's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Laboratory Co. of America | 6.79% | 21.05% | 8.83% |
| The Providence Service | 0.23% | 17.59% | 8.74% |
Institutional & Insider Ownership
89.3% of Laboratory Co. of America shares are owned by institutional investors. 0.7% of Laboratory Co. of America shares are owned by company insiders. Comparatively, 7.5% of The Providence Service shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
Earnings and Valuation
This table compares Laboratory Co. of America and The Providence Service's gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Laboratory Co. of America | $11.55 billion | 2.07 | $823.80 million | $11.32 | 21.64 |
| The Providence Service | $1.51 billion | 1.37 | $970,000.00 | $1.65 | 88.48 |
Laboratory Co. of America has higher revenue and earnings than The Providence Service. Laboratory Co. of America is trading at a lower price-to-earnings ratio than The Providence Service, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Laboratory Co. of America has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, The Providence Service has a beta of 0.84, suggesting that its stock price is 16% less volatile than the S&P 500.
Summary
Laboratory Co. of America beats The Providence Service on 11 of the 14 factors compared between the two stocks.
