Financial Review: Cotiviti (COTV) & MAXIMUS (MMS)

Cotiviti (NYSE:COTV) and MAXIMUS (NYSE:MMS) are both mid-cap business services companies, but which is the better business? We will compare the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, analyst recommendations, valuation and dividends.

Insider & Institutional Ownership

90.4% of Cotiviti shares are owned by institutional investors. Comparatively, 93.1% of MAXIMUS shares are owned by institutional investors. 7.5% of Cotiviti shares are owned by insiders. Comparatively, 2.5% of MAXIMUS shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.



Profitability

This table compares Cotiviti and MAXIMUS’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cotiviti 21.49% 12.44% 6.65%
MAXIMUS 9.28% 21.51% 15.70%

Dividends

MAXIMUS pays an annual dividend of $0.18 per share and has a dividend yield of 0.3%. Cotiviti does not pay a dividend. MAXIMUS pays out 5.9% of its earnings in the form of a dividend.

Risk and Volatility

Cotiviti has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500. Comparatively, MAXIMUS has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500.

Valuation and Earnings

This table compares Cotiviti and MAXIMUS’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cotiviti $678.66 million 6.18 $138.20 million $1.42 31.51
MAXIMUS $2.45 billion 1.72 $209.42 million $3.03 21.64

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

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Cotiviti and MAXIMUS, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cotiviti 0 11 0 0 2.00
MAXIMUS 0 2 0 0 2.00

Cotiviti currently has a consensus price target of $35.08, suggesting a potential downside of 21.58%. MAXIMUS has a consensus price target of $72.33, suggesting a potential upside of 10.30%. Given MAXIMUS’s higher possible upside, analysts clearly believe MAXIMUS is more favorable than Cotiviti.

Summary

MAXIMUS beats Cotiviti on 9 of the 14 factors compared between the two stocks.

Cotiviti Company Profile

Cotiviti Holdings, Inc., through its subsidiaries, provides analytics-driven payment accuracy and spend management solutions primarily for the healthcare sector in the United States, Canada, the United Kingdom, and India. It operates through two segments, Healthcare, and Global Retail and Other. The company offers prospective claims accuracy solutions that enable healthcare clients identify and address claim discrepancies immediately following claim adjudication and before a claim is paid to a healthcare provider; and retrospective claims accuracy solutions that enable health insurers identify and resolve payment inaccuracies after a claim has been paid to a healthcare provider. It also provides analytics and support services, including anti-fraud, waste, and abuse analytics to identify abnormal patterns in coding and billing practices; surveillance and longitudinal analytics; and claims history analytics to identify areas for direct interaction, as well as to identify policy and program changes that can enhance future payment accuracy. The company was formerly known as Connolly Superholdings, Inc. and changed its name to Cotiviti Holdings, Inc. in September 2015. Cotiviti Holdings, Inc. was founded in 1979 and is headquartered in Atlanta, Georgia.

MAXIMUS Company Profile

MAXIMUS, Inc. provides business process services (BPS) to government health and human services programs in the United States, the United Kingdom, Australia, Canada, Singapore, and Saudi Arabia. The company's Health Services segment offers various BPS, appeals, and assessments, as well as related consulting services for state, provincial, and national government programs comprising Medicaid, Children's Health Insurance Program, the Affordable Care Act, Health Insurance British Columbia, the Health Assessment Advisory Service, and Preadmission Screening and Resident Reviews. Its services include health insurance exchange customer contact center operations and support; health insurance program eligibility and enrollment; beneficiary outreach and education; application assistance and independent health plan enrollment counseling; premium payment processing and administration; eHealth solutions; independent disability, long-term sick, and health assessments; occupational health clinical assessments; and specialized program consulting services. The company's U.S. Federal Services segment offers services, including centralized customer contact centers and support services; documents and records management; and case management, citizen engagement, and consumer education; independent medical reviews and worker's compensation benefit appeals; health benefit appeals; eligibility appeals; modernization of systems and IT infrastructure; infrastructure operations and support; software development, operations, and management; and data analytics. Its Human Services segment provides national, state, and local human services agencies with various BPS and related consulting services for welfare-to-work, child support, and higher education; and management tools and professional consulting, program consulting, and tax credit and employer services. MAXIMUS, Inc. was founded in 1975 and is headquartered in Reston, Virginia.

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