Critical Comparison: Rite Aid (RAD) versus Covetrus (CVET)

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Rite Aid (NYSE:RAD) and Covetrus (NASDAQ:CVET) are both retail/wholesale companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, earnings, risk, profitability and valuation.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Rite Aid and Covetrus, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rite Aid 1 4 0 0 1.80
Covetrus 0 0 3 0 3.00

Rite Aid presently has a consensus target price of $2.20, indicating a potential upside of 226.22%. Covetrus has a consensus target price of $45.00, indicating a potential upside of 29.38%. Given Rite Aid’s higher possible upside, equities analysts plainly believe Rite Aid is more favorable than Covetrus.

Profitability

This table compares Rite Aid and Covetrus’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rite Aid 2.85% -0.94% -0.18%
Covetrus N/A N/A N/A

Institutional and Insider Ownership

44.9% of Rite Aid shares are owned by institutional investors. 2.6% of Rite Aid shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Rite Aid and Covetrus’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rite Aid $21.53 billion 0.03 $943.47 million ($0.02) -33.72
Covetrus N/A N/A N/A N/A N/A

Rite Aid has higher revenue and earnings than Covetrus.

Summary

Rite Aid beats Covetrus on 5 of the 9 factors compared between the two stocks.

About Rite Aid

Rite Aid Corporation, through its subsidiaries, operates a chain of retail drugstores in the United States. It operates through two segments, Retail Pharmacy and Pharmacy Services. The Retail Pharmacy segment sells prescription drugs and a range of other merchandise, including over-the-counter medications, health and beauty aids, personal care items, cosmetics, household items, food and beverages, greeting cards, seasonal merchandise, and other every day and convenience products. It also operates retail clinics that provide treatment for common conditions; and a range of preventive services comprising screenings, medical tests, immunizations, and basic physical exams. In addition, this segment offers healthcare coaching and disease management services. The Pharmacy Services segment provides pharmacy benefit management (PBM) services and a range of pharmacy-related services. This segment also performs prescription adjudication services for other PBMs; and offers integrated mail-order, specialty and compounding pharmacy, and infertility treatment services, as well as drug benefits under the federal government's Medicare Part D program. As of April 12, 2018, the company operated approximately 2,548 stores in 19 states. Rite Aid Corporation was founded in 1927 and is headquartered in Camp Hill, Pennsylvania.

About Covetrus

Covetrus, Inc. operates as an animal-health technology and services company. The company engages in the distribution of pharmaceuticals, nutrition products, consumable products, diagnostic tests, small and large equipment, laboratory products, surgical products, and others. It also develops, sells, and distributes practice management software systems and computer hardware for animal health customers, as well as offers software support, data driven applications, training and education, client communication services, and value-added services. In addition, the company operates technology platform that encompasses and integrates the functionality of pharmacy service, and prescription and inventory management in a single, secure, and regulatory-compliant system. It serves animal health practices and clinics in the companion animal and equine markets in North America, Europe, and Australasia. Covetrus, Inc. is headquartered in Portland, Maine.

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