The population today is on the blow and its expansion is increasing continually. Moreover the life span of people is also increasing. This rise in both population and the ages of people has led to ramping up of the volume of medicines prescribed out there. Rite Aid Corporation (NYSE:RAD) and CVS Health (NYSE:CVS) are two such companies who are in a position of deploying this very situation for their own benefit.
Both the companies have a significant position in the industry and over the years have yielded astounding results for their investors. But the question that yet needs to be addressed is that which one of these outweighs the other in terms of its profitability and other such likely factors. Given below is a comparison between these very factors of both Rite Aid Corporation (NYSE:RAD) and CVS Health (NYSE:CVS).
The total stores out there which Rite Aid Corporation (NYSE:RAD) owns to its name amount to almost 4,572. Overall, it comprises of 6% of the total revenue generated from Prescription Medicine Market. As a consequence, the company can be ranked third as far as the size and monstrosity of its pharmacy store network is considered. On the other hand, the number of stored owned and operated by CVS Health (NYSE:CVS) is even larger. The latter company owns 7,981 stores, and both its store chain and pharmacy services conjugate to make up almost 22.6% of the market share.
An escalation can be observed in the sale rate of both the companies over the years. Rite Aid Corporation (NYSE:RAD) has shown a progression of 5.3% from the previous year since now its quarter results show that the company made sales of almost $6.7 billion. CVS Health (NYSE:CVS) on the other hand also delineated a growth rate of 12.9% as compared to last year, since the financial results of the last quarter reflected that the sales carried out by the company stood at $37.1 billion.
Not only has the sale growth increased for both companies, rather their earnings are also moving up the hill. The gross revenue of Rite Aid Corporation (NYSE:RAD) has seen an increase of 46.6% from the previous company, whilst its competitor company underwent a growth rate of 4.43%.
Another factor which should be considered is the balance sheet and what does it delineate. The balance sheet of the two companies indeed lets us know that one of them has entrenched its feet more securely than the other. Rite Aid Corporation (NYSE:RAD) has accumulated negative debt to equity, which is a clear indication of the fact that the company has work to do before it can stand on stable grounds. CVS Health’s (NYSE:CVS) balance sheet on the other hand shows better prospects.
The valuation marks suggest various things. They let us know which one of company offers cheaper stocks. It turns out that that even though currently CVS Health (NYSE:CVS) P/E is comparatively lower, but Rite Aid Corporation (NYSE:RAD) is the one which would go cheaper on the basis of its future growth.
So the ultimate question is that which of the two should one go for? Which one of the two is better?
As far as the profitability, balance sheet and valuation is concerned, CVS Health (NYSE:CVS) outsteps Rite Aid Corporation (NYSE:RAD). Therefore, consequently the former company undeniably has an edge on the latter.
