Contrasting CVS Health (NYSE:CVS) and COMPASS Pathways (NASDAQ:CMPS)

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

Valuation & Earnings

This table compares CVS Health and COMPASS Pathways”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CVS Health	$394.08 billion	0.24	$4.61 billion	$0.38	200.15
COMPASS Pathways	N/A	N/A	-$155.12 million	($2.72)	-1.91

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

Insider and Institutional Ownership

80.7% of CVS Health shares are held by institutional investors. Comparatively, 46.2% of COMPASS Pathways shares are held by institutional investors. 1.2% of CVS Health shares are held by insiders. Comparatively, 3.9% of COMPASS Pathways shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares CVS Health and COMPASS Pathways’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CVS Health	0.12%	11.45%	3.40%
COMPASS Pathways	N/A	-111.18%	-56.55%

Analyst Recommendations

This is a summary of current ratings for CVS Health and COMPASS Pathways, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CVS Health	0	4	21	2	2.93
COMPASS Pathways	1	1	7	0	2.67

CVS Health presently has a consensus target price of $89.41, suggesting a potential upside of 17.56%. COMPASS Pathways has a consensus target price of $15.88, suggesting a potential upside of 205.29%. Given COMPASS Pathways’ higher probable upside, analysts plainly believe COMPASS Pathways is more favorable than CVS Health.

Volatility & Risk

CVS Health has a beta of 0.6, indicating that its stock price is 40% less volatile than the S&P 500. Comparatively, COMPASS Pathways has a beta of 2.22, indicating that its stock price is 122% more volatile than the S&P 500.

Summary

CVS Health beats COMPASS Pathways on 11 of the 14 factors compared between the two stocks.

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.

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.