Financial Contrast: Labcorp (NYSE:LH) versus HCA Healthcare (NYSE:HCA)

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

Insider and Institutional Ownership

95.9% of Labcorp shares are owned by institutional investors. Comparatively, 62.7% of HCA Healthcare shares are owned by institutional investors. 0.8% of Labcorp shares are owned by insiders. Comparatively, 1.5% of HCA Healthcare shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Dividends

Labcorp pays an annual dividend of $2.88 per share and has a dividend yield of 0.9%. HCA Healthcare pays an annual dividend of $3.12 per share and has a dividend yield of 0.7%. Labcorp pays out 23.8% of its earnings in the form of a dividend. HCA Healthcare pays out 10.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. HCA Healthcare has raised its dividend for 6 consecutive years.

Volatility & Risk

Labcorp has a beta of 0.88, indicating that its share price is 12% less volatile than the S&P 500. Comparatively, HCA Healthcare has a beta of 1.1, indicating that its share price is 10% more volatile than the S&P 500.

Earnings & Valuation

This table compares Labcorp and HCA Healthcare”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Labcorp	$13.95 billion	1.87	$876.50 million	$12.09	26.57
HCA Healthcare	$75.60 billion	1.22	$6.78 billion	$29.87	14.29

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Labcorp	6.99%	16.74%	7.81%
HCA Healthcare	8.77%	-244.79%	11.10%

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Labcorp and HCA Healthcare, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Labcorp	0	3	9	0	2.75
HCA Healthcare	1	8	14	0	2.57

Labcorp presently has a consensus price target of $337.73, suggesting a potential upside of 5.12%. HCA Healthcare has a consensus price target of $462.27, suggesting a potential upside of 8.28%. Given HCA Healthcare’s higher probable upside, analysts clearly believe HCA Healthcare is more favorable than Labcorp.

Summary

HCA Healthcare beats Labcorp on 11 of the 17 factors compared between the two stocks.

About Labcorp

Labcorp Holdings, Inc. engages in providing medical testing services. The company was founded on April 16, 2024 and is headquartered in Burlington, NC.

About HCA Healthcare

HCA Healthcare, Inc., through its subsidiaries, owns and operates hospitals and related healthcare entities in the United States. It operates general and acute care hospitals that offers medical and surgical services, including inpatient care, intensive care, cardiac care, diagnostic, and emergency services; and outpatient services, such as outpatient surgery, laboratory, radiology, respiratory therapy, cardiology, and physical therapy. The company also operates outpatient health care facilities consisting of freestanding ambulatory surgery centers, freestanding emergency care facilities, urgent care facilities, walk-in clinics, diagnostic and imaging centers, rehabilitation and physical therapy centers, radiation and oncology therapy centers, physician practices, and various other facilities. In addition, it operates behavioral hospitals, which provide therapeutic programs comprising child, adolescent and adult psychiatric care, adolescent and adult alcohol, drug abuse treatment, and counseling services. The company was formerly known as HCA Holdings, Inc. HCA Healthcare, Inc. was founded in 1968 and is headquartered in Nashville, Tennessee.