Head to Head Contrast: McKesson (MCK) versus The Competition

McKesson (NYSE:MCK) is one of 26 publicly-traded companies in the “MED/DENTAL – SUPP” industry, but how does it contrast to its competitors? We will compare McKesson to similar companies based on the strength of its earnings, profitability, institutional ownership, analyst recommendations, dividends, valuation and risk.

Insider & Institutional Ownership

85.1% of McKesson shares are owned by institutional investors. Comparatively, 69.6% of shares of all “MED/DENTAL – SUPP” companies are owned by institutional investors. 0.1% of McKesson shares are owned by insiders. Comparatively, 9.5% of shares of all “MED/DENTAL – SUPP” companies are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares McKesson and its competitors top-line revenue, earnings per share and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
McKesson	$359.05 billion	$3.30 billion	27.80
McKesson Competitors	$37.61 billion	$430.42 million	19.47

McKesson has higher revenue and earnings than its competitors. McKesson is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Dividends

McKesson pays an annual dividend of $2.84 per share and has a dividend yield of 0.4%. McKesson pays out 11.0% of its earnings in the form of a dividend. As a group, “MED/DENTAL – SUPP” companies pay a dividend yield of 0.8% and pay out 26.2% of their earnings in the form of a dividend. McKesson has increased its dividend for 17 consecutive years.

Analyst Recommendations

This is a breakdown of recent ratings for McKesson and its competitors, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
McKesson	0	3	10	1	2.86
McKesson Competitors	104	1127	2019	112	2.64

McKesson currently has a consensus price target of $696.42, indicating a potential downside of 3.00%. As a group, “MED/DENTAL – SUPP” companies have a potential upside of 27.78%. Given McKesson’s competitors higher possible upside, analysts clearly believe McKesson has less favorable growth aspects than its competitors.

Profitability

This table compares McKesson and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
McKesson	0.92%	-201.12%	5.83%
McKesson Competitors	2.88%	-3.91%	7.65%

Volatility & Risk

McKesson has a beta of 0.49, suggesting that its share price is 51% less volatile than the S&P 500. Comparatively, McKesson’s competitors have a beta of 0.59, suggesting that their average share price is 41% less volatile than the S&P 500.

Summary

McKesson beats its competitors on 8 of the 15 factors compared.

About McKesson

McKesson Corporation provides healthcare services in the United States and internationally. It operates through four segments: U.S. Pharmaceutical, Prescription Technology Solutions (RxTS), Medical-Surgical Solutions, and International. The U.S. Pharmaceutical segment distributes branded, generic, specialty, biosimilar and over-the-counter pharmaceutical drugs, and other healthcare-related products. This segment also offers practice management, technology, clinical support, and business solutions to community-based oncology and other specialty practices; and consulting, outsourcing, technological, and other services, as well as sells financial, operational, and clinical solutions to pharmacies. The RxTS segment serves biopharma and life sciences partners, and patients to address medication challenges for patients by working across healthcare; connects patients, pharmacies, providers, pharmacy benefit managers, health plans, and biopharma companies to deliver innovative solutions to help people get the medicine needed to live healthier lives; and provides prescription price transparency, benefit insight, dispensing support, third-party logistics, and wholesale distribution support services. The Medical-Surgical Solutions segment offers medical-surgical supply distribution, logistics, and other services to healthcare providers, including physician offices, surgery centers, nursing homes, hospital reference labs, and home health care agencies. The International segment provides distribution and services to wholesale, institutional, and retail customers in Europe and Canada. McKesson Corporation was founded in 1833 and is headquartered in Irving, Texas.