Comparing Elevance Health (NYSE:ELV) & Compass Pathways (NASDAQ:CMPS)

Compass Pathways (NASDAQ:CMPS) and Elevance Health (NYSE:ELV) are both medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, earnings, institutional ownership, risk, analyst recommendations and valuation.

Institutional and Insider Ownership

46.2% of Compass Pathways shares are owned by institutional investors. Comparatively, 89.2% of Elevance Health shares are owned by institutional investors. 3.9% of Compass Pathways shares are owned by company insiders. Comparatively, 0.3% of Elevance Health shares are owned 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.

Earnings & Valuation

This table compares Compass Pathways and Elevance Health”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Compass Pathways	N/A	N/A	-$287.86 million	($3.09)	-1.79
Elevance Health	$199.13 billion	0.32	$5.66 billion	$25.12	11.67

Elevance Health has higher revenue and earnings than Compass Pathways. Compass Pathways is trading at a lower price-to-earnings ratio than Elevance Health, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Compass Pathways has a beta of 1.9, suggesting that its share price is 90% more volatile than the S&P 500. Comparatively, Elevance Health has a beta of 0.51, suggesting that its share price is 49% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Compass Pathways and Elevance Health, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Compass Pathways	1	1	6	1	2.78
Elevance Health	1	9	12	0	2.50

Compass Pathways presently has a consensus price target of $21.63, suggesting a potential upside of 291.76%. Elevance Health has a consensus price target of $387.40, suggesting a potential upside of 32.17%. Given Compass Pathways’ stronger consensus rating and higher probable upside, research analysts clearly believe Compass Pathways is more favorable than Elevance Health.

Profitability

This table compares Compass Pathways and Elevance Health’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Compass Pathways	N/A	-192.95%	-61.31%
Elevance Health	2.84%	15.59%	5.60%

Summary

Elevance Health beats Compass Pathways on 9 of the 14 factors compared between the two stocks.

About Compass Pathways

Compass Pathways plc operates as a mental health care company in the United Kingdom and the United States. It develops COMP360, a psilocybin therapy that is in Phase III clinical trials for the treatment of treatment-resistant depression; and is in Phase II clinical trials for the treatment of post-traumatic stress disorder and anorexia nervosa. The company was formerly known as COMPASS Rx Limited and changed its name to Compass Pathways plc in August 2020. Compass Pathways plc was incorporated in 2020 and is headquartered in London, the United Kingdom.

About Elevance Health

Elevance Health, Inc., together with its subsidiaries, operates as a health benefits company in the United States. The company operates through four segments: Health Benefits, CarelonRx, Carelon Services, and Corporate & Other. It offers a variety of health plans and services to program members; health products; an array of fee-based administrative managed care services; and specialty and other insurance products and services, such as stop loss, dental, vision, life, disability, and supplemental health insurance benefits. The company operates in the pharmacy services business; and markets and offers pharmacy services, including pharmacy benefit management, as well as home delivery and specialty pharmacies, claims adjudication, formulary management, pharmacy networks, rebate administration, a prescription drug database, and member services. In addition, it provides healthcare-related services and capabilities, including utilization management, behavioral health, integrated care delivery, palliative care, payment integrity services, subrogation services, and health and wellness programs, as well as services related to data management, information technology, and business operations. Further, the company is involved in the National Government Services business. The company provides its services under the Anthem Blue Cross and Blue Shield, Wellpoint, and Carelon brand names. The company was formerly known as Anthem, Inc. and changed its name to Elevance Health, Inc. in June 2022. Elevance Health, Inc. was incorporated in 2001 and is headquartered in Indianapolis, Indiana.