Investors are weighing the potential of two medical companies, Cardinal Health (NYSE: CAH) and Lifevantage (NASDAQ: LFVN), as they assess which stock may offer greater returns. This analysis compares key financial metrics, including risk, dividends, earnings, profitability, and analyst recommendations to provide a clearer picture for potential investors.
Analyst Recommendations and Target Prices
According to MarketBeat.com, Cardinal Health currently holds a consensus target price of $212.60, which suggests a potential upside of approximately 5.74%. In contrast, Lifevantage has a significantly higher consensus target price of $23.50, translating to an impressive potential upside of 262.10%. This stark difference indicates that analysts view Lifevantage as the more favorable option for growth at this time.
Valuation and Earnings Performance
When it comes to revenue and earnings, Cardinal Health leads the way. The company generates more substantial revenue compared to Lifevantage, which is reflected in its higher earnings figures. On the other hand, Lifevantage enjoys a lower price-to-earnings ratio, suggesting it is a more affordable investment relative to its earnings potential. This could appeal to investors seeking value.
Profitability metrics show that both companies have solid performances, but Cardinal Health excels in net margins, return on equity, and return on assets. This indicates a stronger overall financial health compared to Lifevantage, which is still establishing its market presence.
Risk is another critical area of comparison. Cardinal Health has a beta of 0.65, indicating its share price is 35% less volatile than the S&P 500. Lifevantage, with a beta of 0.34, is even less volatile, suggesting its price is 66% less susceptible to market fluctuations.
Institutional Ownership and Dividends
Institutional investors hold a significant portion of Cardinal Health’s shares, with 87.2% of its stock owned by these entities. This high level of institutional ownership often reflects confidence in long-term growth prospects. Lifevantage, by comparison, has 35.3% of its shares held by institutional investors, which is relatively lower.
In terms of insider ownership, 0.1% of Cardinal Health’s shares are held by company insiders, whereas Lifevantage sees a much higher insider ownership rate of 22.0%. This may suggest a greater level of personal investment and belief in the company’s future among Lifevantage’s executives.
Both companies also offer dividends, but they cater to different investor preferences. Cardinal Health pays an annual dividend of $2.04 per share, resulting in a dividend yield of 1.0%. Lifevantage offers a smaller annual dividend of $0.18 per share, but its yield is noticeably higher at 2.8%. Cardinal Health’s payout ratio is 30.8%, while Lifevantage’s stands at 23.4%. Investors seeking dividends may find Lifevantage more appealing due to its higher yield and lower payout ratio.
Company Profiles
Cardinal Health, Inc., established in 1979 and headquartered in Dublin, Ohio, operates as a healthcare services and products company across the United States and internationally. Its offerings include customized solutions for various healthcare sectors and two main segments: Pharmaceutical and Medical. The Pharmaceutical segment focuses on the distribution of branded and generic pharmaceuticals, while the Medical segment provides a wide range of medical and surgical products.
On the other hand, Lifevantage Corporation, founded in 2003 and located in Lehi, Utah, specializes in the research and sale of dietary supplements and skincare products. Its product range includes innovative formulations targeting health and wellness, such as its famous Protandim dietary supplement and various skincare solutions. Lifevantage utilizes a network of independent distributors and a direct sales model to reach customers across multiple countries.
In summary, while Cardinal Health surpasses Lifevantage in several financial metrics, including revenue and profitability, Lifevantage’s higher potential upside and attractive dividend yield may appeal to different types of investors. Each company presents unique opportunities, making it essential for investors to consider their individual strategies and risk tolerance before making any decisions.
