Diplomat Pharmacy (NYSE: DPLO) and Quest Diagnostics (NYSE:DGX) are both retail/wholesale companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, dividends, valuation and analyst recommendations.
Volatility & Risk
Diplomat Pharmacy has a beta of 0.74, indicating that its share price is 26% less volatile than the S&P 500. Comparatively, Quest Diagnostics has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500.
Quest Diagnostics pays an annual dividend of $1.80 per share and has a dividend yield of 2.0%. Diplomat Pharmacy does not pay a dividend. Quest Diagnostics pays out 37.7% of its earnings in the form of a dividend. Quest Diagnostics has raised its dividend for 5 consecutive years.
This is a summary of current ratings and recommmendations for Diplomat Pharmacy and Quest Diagnostics, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Diplomat Pharmacy presently has a consensus price target of $19.56, indicating a potential downside of 0.50%. Quest Diagnostics has a consensus price target of $104.42, indicating a potential upside of 13.43%. Given Quest Diagnostics’ stronger consensus rating and higher possible upside, analysts clearly believe Quest Diagnostics is more favorable than Diplomat Pharmacy.
This table compares Diplomat Pharmacy and Quest Diagnostics’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional & Insider Ownership
67.4% of Diplomat Pharmacy shares are owned by institutional investors. Comparatively, 89.0% of Quest Diagnostics shares are owned by institutional investors. 30.2% of Diplomat Pharmacy shares are owned by company insiders. Comparatively, 1.8% of Quest Diagnostics shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Valuation & Earnings
This table compares Diplomat Pharmacy and Quest Diagnostics’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Diplomat Pharmacy||$4.41 billion||0.31||$28.27 million||$0.10||196.60|
|Quest Diagnostics||$7.52 billion||1.67||$645.00 million||$4.77||19.30|
Quest Diagnostics has higher revenue and earnings than Diplomat Pharmacy. Quest Diagnostics is trading at a lower price-to-earnings ratio than Diplomat Pharmacy, indicating that it is currently the more affordable of the two stocks.
Quest Diagnostics beats Diplomat Pharmacy on 13 of the 17 factors compared between the two stocks.
Diplomat Pharmacy Company Profile
Diplomat Pharmacy, Inc. (Diplomat) operates a specialty pharmacy business, which stocks, dispenses and distributes prescriptions for various biotechnology and specialty pharmaceutical manufacturers. The Company operates through specialty pharmacy services segment. The Company’s primary focus is on medication management programs for individuals with chronic diseases, including oncology, immunology, hepatitis, multiple sclerosis, specialty infusion therapy, and various other serious and/or long-term conditions. The Company provides specialty pharmacy support services to a national network of retailers and independent pharmacy groups, hospitals and health systems. The Company offers various services, such as specialty drug dispensing, retail specialty services, hospital and health system services, and hub services. The Company’s patient care system is used to coordinate and track patient adherence and safety.
Quest Diagnostics Company Profile
Quest Diagnostics Incorporated is a provider of diagnostic information services. The Company operates through two businesses: Diagnostic Information Services and Diagnostic Solutions. The Diagnostic Information Services business develops and delivers diagnostic testing information and services, providing insights that empower and enable a range of customers, including patients, clinicians, hospitals, integrated delivery networks (IDNs), health plans, employers and accountable care organizations (ACOs). Its Diagnostic Solutions group includes its risk assessment services business, which offers solutions for insurers, and its healthcare information technology businesses, which offers solutions for healthcare providers. The Company’s services are provided under the Quest Diagnostics brand, but it also provides services under other brands, including AmeriPath, Dermpath Diagnostics, Focus Diagnostics, Athena Diagnostics, ExamOne, Quanum and Care360.
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