Critical Analysis: Elevance Health (NYSE:ELV) and Surgery Partners (NASDAQ:SGRY)

Elevance Health (NYSE:ELV) and Surgery Partners (NASDAQ:SGRY) are both medical companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, dividends, profitability, analyst recommendations, valuation, risk and institutional ownership.

Institutional & Insider Ownership

89.2% of Elevance Health shares are held by institutional investors. 0.3% of Elevance Health shares are held by insiders. Comparatively, 2.7% of Surgery Partners 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.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Elevance Health and Surgery Partners, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Elevance Health	1	10	12	0	2.48
Surgery Partners	1	2	7	0	2.60

Elevance Health currently has a consensus price target of $397.33, indicating a potential upside of 21.78%. Surgery Partners has a consensus price target of $28.89, indicating a potential upside of 91.32%. Given Surgery Partners’ stronger consensus rating and higher possible upside, analysts clearly believe Surgery Partners is more favorable than Elevance Health.

Valuation & Earnings

This table compares Elevance Health and Surgery Partners”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Elevance Health	$194.82 billion	0.37	$5.98 billion	$24.46	13.34
Surgery Partners	$3.29 billion	0.59	-$168.10 million	($1.36)	-11.10

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

Profitability

This table compares Elevance Health and Surgery Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Elevance Health	2.84%	16.17%	5.78%
Surgery Partners	-5.57%	2.51%	1.01%

Volatility and Risk

Elevance Health has a beta of 0.6, suggesting that its stock price is 40% less volatile than the S&P 500. Comparatively, Surgery Partners has a beta of 1.85, suggesting that its stock price is 85% more volatile than the S&P 500.

Summary

Elevance Health beats Surgery Partners on 9 of the 14 factors compared between the two stocks.

About Elevance Health

Elevance Health, Inc., together with its subsidiaries, operates as a health benefits company in the United States. The company operates through four segments: Health Benefits, CarelonRx, Carelon Services, and Corporate & Other. It offers a variety of health plans and services to program members; health products; an array of fee-based administrative managed care services; and specialty and other insurance products and services, such as stop loss, dental, vision, life, disability, and supplemental health insurance benefits. The company operates in the pharmacy services business; and markets and offers pharmacy services, including pharmacy benefit management, as well as home delivery and specialty pharmacies, claims adjudication, formulary management, pharmacy networks, rebate administration, a prescription drug database, and member services. In addition, it provides healthcare-related services and capabilities, including utilization management, behavioral health, integrated care delivery, palliative care, payment integrity services, subrogation services, and health and wellness programs, as well as services related to data management, information technology, and business operations. Further, the company is involved in the National Government Services business. The company provides its services under the Anthem Blue Cross and Blue Shield, Wellpoint, and Carelon brand names. The company was formerly known as Anthem, Inc. and changed its name to Elevance Health, Inc. in June 2022. Elevance Health, Inc. was incorporated in 2001 and is headquartered in Indianapolis, Indiana.

About Surgery Partners

Surgery Partners, Inc., together with its subsidiaries, owns and operates a network of surgical facilities and ancillary services in the United States. The company provides ambulatory surgery centers and surgical hospitals that offer non-emergency surgical procedures in various specialties, including orthopedics and pain management, ophthalmology, gastroenterology, and general surgery. It offers diagnostic imaging, laboratory, obstetrics, oncology, pharmacy, physical therapy, and wound care; and ancillary services, including multi-specialty physician practices, urgent care facilities, and anesthesia services. In addition, it offers single- and multi-specialty facilities. Surgery Partners, Inc. was founded in 2004 and is headquartered in Brentwood, Tennessee.