Labcorp (NYSE:LH) and CVS Health (NYSE:CVS) Head-To-Head Survey

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

Profitability

This table compares Labcorp and CVS Health’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Labcorp	5.66%	15.45%	7.02%
CVS Health	1.17%	10.51%	3.15%

Earnings & Valuation

This table compares Labcorp and CVS Health”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Labcorp	$13.01 billion	1.82	$746.00 million	$9.06	31.53
CVS Health	$372.81 billion	0.28	$4.61 billion	$3.58	23.08

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

Volatility & Risk

Labcorp has a beta of 0.89, indicating that its share price is 11% less volatile than the S&P 500. Comparatively, CVS Health has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500.

Dividends

Labcorp pays an annual dividend of $2.88 per share and has a dividend yield of 1.0%. CVS Health pays an annual dividend of $2.66 per share and has a dividend yield of 3.2%. Labcorp pays out 31.8% of its earnings in the form of a dividend. CVS Health pays out 74.3% 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. CVS Health has raised its dividend for 4 consecutive years. CVS Health is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of recent ratings for Labcorp and CVS Health, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Labcorp	0	4	11	0	2.73
CVS Health	0	4	20	2	2.92

Labcorp presently has a consensus target price of $296.46, indicating a potential upside of 3.78%. CVS Health has a consensus target price of $82.57, indicating a potential downside of 0.08%. Given Labcorp’s higher possible upside, analysts clearly believe Labcorp is more favorable than CVS Health.

Institutional and Insider Ownership

95.9% of Labcorp shares are owned by institutional investors. Comparatively, 80.7% of CVS Health shares are owned by institutional investors. 0.8% of Labcorp shares are owned by company insiders. Comparatively, 1.2% of CVS Health shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Labcorp beats CVS Health on 10 of the 18 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 CVS Health

CVS Health Corporation provides health solutions in the United States. It operates through Health Care Benefits, Health Services, and Pharmacy & Consumer Wellness segments. The Health Care Benefits segment offers traditional, voluntary, and consumer-directed health insurance products and related services. It serves employer groups, individuals, college students, part-time and hourly workers, health plans, health care providers, governmental units, government-sponsored plans, labor groups, and expatriates. The Health Services segment offers pharmacy benefit management solutions, including plan design and administration, formulary management, retail pharmacy network management, specialty and mail order pharmacy, clinical, disease management, and medical spend management services. It serves employers, insurance companies, unions, government employee groups, health plans, prescription drug plans, Medicaid managed care plans, CMS, plans offered on public health insurance, and other sponsors of health benefit plans. The Pharmacy & Consumer Wellness segment sells prescription and over-the-counter drugs, consumer health and beauty products, and personal care products. This segment also distributes prescription drugs; and provides related pharmacy consulting and other ancillary services to care facilities and other care settings. It operates online retail pharmacy websites, LTC pharmacies and on-site pharmacies, retail specialty pharmacy stores, compounding pharmacies and branches for infusion and enteral nutrition services. The company was formerly known as CVS Caremark Corporation and changed its name to CVS Health Corporation in September 2014. CVS Health Corporation was incorporated in 1996 and is headquartered in Woonsocket, Rhode Island.