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Magellan Health

Nasdaq:MGLN
Snowflake Description

Fair value with mediocre balance sheet.

The Snowflake is generated from 30 checks in 5 different areas, read more below.
MGLN
Nasdaq
$2B
Market Cap
  1. Home
  2. US
  3. Healthcare
Company description

Magellan Health, Inc. provides healthcare management services in the United States. The last earnings update was 99 days ago. More info.


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MGLN Share Price and Events
7 Day Returns
0.4%
NasdaqGS:MGLN
-0.8%
US Healthcare
0.5%
US Market
1 Year Returns
-33.9%
NasdaqGS:MGLN
9.3%
US Healthcare
2%
US Market
MGLN Shareholder Return
  7 Day 30 Day 90 Day 1 Year 3 Year 5 Year
Magellan Health (MGLN) 0.4% 4% 13.3% -33.9% 15.6% 5.9%
US Healthcare -0.8% 5.4% -3.6% 9.3% 40.3% 88%
US Market 0.5% 6.3% 1.9% 2% 45.1% 40.5%
1 Year Return vs Industry and Market
  • MGLN underperformed the Healthcare industry which returned 9.3% over the past year.
  • MGLN underperformed the Market in United States of America which returned 2% over the past year.
Price Volatility
MGLN
Industry
5yr Volatility vs Market

Value

 Is Magellan Health undervalued based on future cash flows and its price relative to the stock market?

Value is all about what a company is worth versus what price it is available for. If you went into a grocery store and all the bananas were on sale at half price, they could be considered undervalued.
INTRINSIC VALUE BASED ON FUTURE CASH FLOWS
Here we compare the current share price of Magellan Health to its discounted cash flow analysis.value.

The discounted cash flow value is simply looking at what the company is worth today, based on estimates of how much money it is expected to make in the future.
Raw Data

Below are the data sources, inputs and calculation used to determine the intrinsic value for Magellan Health.

NasdaqGS:MGLN Discounted Cash Flow Data Sources
Data Point Source Value
Valuation Model 2 Stage Free Cash Flow to Equity
Levered Free Cash Flow Average of 3 Analyst Estimates (S&P Global) See below
Discount Rate (Cost of Equity) See below 10.6%
Perpetual Growth Rate 10-Year US Government Bond Rate 2.7%

An important part of a discounted cash flow is the discount rate, below we explain how it has been calculated.

Calculation of Discount Rate/ Cost of Equity for NasdaqGS:MGLN
Data Point Calculation/ Source Result
Risk-Free Rate 10-Year US Govt Bond Rate 2.7%
Equity Risk Premium S&P Global 7.3%
Healthcare Unlevered Beta Simply Wall St/ S&P Global 0.77
Re-levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
= 0.768 (1 + (1- 21%) (51.86%))
1.083
Levered Beta Levered Beta limited to 0.8 to 2.0
(practical range for a stable firm)
1.08
Discount Rate/ Cost of Equity = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
= 2.73% + (1.083 * 7.27%)
10.6%

Discounted Cash Flow Calculation for NasdaqGS:MGLN using 2 Stage Free Cash Flow to Equity Model

The calculations below outline how an intrinsic value for Magellan Health is arrived at by discounting future cash flows to their present value using the 2 stage method. We use analyst's estimates of cash flows going forward 5 years for the 1st stage, the 2nd stage assumes the company grows at a stable rate into perpetuity.

NasdaqGS:MGLN DCF 1st Stage: Next 5 year cash flow forecast
2019 2020 2021 2022 2023
Levered FCF (USD, Millions) 98.41 112.26 128.05 146.07 166.62
Source Est @ 14.07% Est @ 14.07% Est @ 14.07% Est @ 14.07% Est @ 14.07%
Present Value
Discounted (@ 10.6%)
88.97 91.76 94.64 97.60 100.66
Present value of next 5 years cash flows $473.64
NasdaqGS:MGLN DCF 2nd Stage: Terminal Value
Calculation Result
Terminal Value = FCF2023 × (1 + g) ÷ (Discount Rate – g)
= $166.62 × (1 + 2.73%) ÷ (10.6% – 2.73%)
$2,173.79
Present Value of Terminal Value = Terminal Value ÷ (1 + r)5
= $2,173.79 ÷ (1 + 10.6%)5
$1,313.28
NasdaqGS:MGLN Total Equity Value
Calculation Result
Total Equity Value = Present value of next 5 years cash flows + Terminal Value
= $473.64 + $1,313.28
$1,786.92
Equity Value per Share
(USD)
= Total value / Shares Outstanding
= $1,786.92 / 24.26
$73.67
NasdaqGS:MGLN Discount to Share Price
Calculation Result
Value per share (USD) From above. $73.67
Current discount Discount to share price of $63.50
= -1 x ($63.50 - $73.67) / $73.67
13.8%

Learn more about our DCF calculations in Simply Wall St’s analysis model .

Current Discount
Amount off the current price Magellan Health is available for.
Intrinsic value
14%
Share price is $63.5 vs Future cash flow value of $73.67
Current Discount Checks
For Magellan Health to be considered undervalued it must be available for at least 20% below the current price. Less than 40% is even better.
  • Magellan Health's share price is below the future cash flow value, but not at a moderate discount (< 20%).
  • Magellan Health's share price is below the future cash flow value, but not at a substantial discount (< 40%).
PRICE RELATIVE TO MARKET
We can also value a company based on what the stock market is willing to pay for it. This is similar to the price of fruit (e.g. Mangoes or Avocados) increasing when they are out of season, or how much your home is worth.

The amount the stock market is willing to pay for Magellan Health's earnings, growth and assets is considered below, and whether this is a fair price.
Price based on past earnings
Are Magellan Health's earnings available for a low price, and how does this compare to other companies in the same industry?
Raw Data
NasdaqGS:MGLN PE (Price to Earnings) Ratio Data Sources
Data Point Source Value
Earnings Per Share * Company Filings (2018-09-30) in USD $4.39
NasdaqGS:MGLN Share Price ** NasdaqGS (2019-02-13) in USD $63.5
United States of America Healthcare Industry PE Ratio Median Figure of 52 Publicly-Listed Healthcare Companies 21.6x
United States of America Market PE Ratio Median Figure of 3,046 Publicly-Listed Companies 16.95x

* Trailing twelve months (TTM) annual GAAP earnings per share excluding extraordinary items.

** Primary Listing of Magellan Health.

NasdaqGS:MGLN PE (Price to Earnings) Ratio Calculation
Calculation Outcome
PE Ratio

= NasdaqGS:MGLN Share Price ÷ EPS (both in USD)

= 63.5 ÷ 4.39

14.48x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Magellan Health is good value based on earnings compared to the US Healthcare industry average.
  • Magellan Health is good value based on earnings compared to the United States of America market.
Price based on expected Growth
Does Magellan Health's expected growth come at a high price?
Raw Data
NasdaqGS:MGLN PEG (Price to Earnings to Growth) Ratio Data Sources
Data Point Source Value
PE Ratio See PE Ratio Section 14.48x
Net Income Annual Growth Rate See Future Growth Section.
Line of Best Fit* through Consensus Estimate Earnings of 3 Analysts
4.6%per year
United States of America Healthcare Industry PEG Ratio Median Figure of 39 Publicly-Listed Healthcare Companies 1.49x
United States of America Market PEG Ratio Median Figure of 2,117 Publicly-Listed Companies 1.36x

*Line of best fit is calculated by linear regression .

NasdaqGS:MGLN PEG (Price to Earnings to Growth) Ratio Calculation
Calculation Outcome
PEG Ratio

= PE Ratio ÷ Net Income Annual Growth Rate

= 14.48x ÷ 4.6%

3.12x

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Magellan Health is poor value based on expected growth next year.
Price based on value of assets
What value do investors place on Magellan Health's assets?
Raw Data
NasdaqGS:MGLN PB (Price to Book) Ratio Data Sources
Data Point Source Value
Book Value per Share Company Filings (2018-09-30) in USD $54.91
NasdaqGS:MGLN Share Price * NasdaqGS (2019-02-13) in USD $63.5
United States of America Healthcare Industry PB Ratio Median Figure of 91 Publicly-Listed Healthcare Companies 2.49x
United States of America Market PB Ratio Median Figure of 5,122 Publicly-Listed Companies 1.81x
NasdaqGS:MGLN PB (Price to Book) Ratio Calculation
Calculation Outcome
PB Ratio

= NasdaqGS:MGLN Share Price ÷ Book Value per Share (both in USD)

= 63.5 ÷ 54.91

1.16x

* Primary Listing of Magellan Health.

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Magellan Health is good value based on assets compared to the US Healthcare industry average.
X
Value checks
We assess Magellan Health's value by looking at:
  1. Is the discounted cash flow value less than 20%, or 40% of the share price? (2 checks) ( Click here or on bar chart for details of DCF calculation. )
  2. Is the PE ratio less than the market average, and/ or less than the Healthcare industry average (and greater than 0)? (2 checks)
  3. Is the PEG ratio within a reasonable range (0 to 1)? (1 check)
  4. Is the PB ratio less than the Healthcare industry average (and greater than 0)? (1 check)
  5. Magellan Health has a total score of 3/6, see the detailed checks below.

    Note: We use GAAP Earnings per Share in all our calculations including PE and PEG Ratio.

    Full details on the Value part of the Simply Wall St company analysis model.

Future Performance

 How is Magellan Health expected to perform in the next 1 to 3 years based on estimates from 3 analysts?

The future performance of a company is measured in the same way as past performance, by looking at estimated growth and how much profit it is expected to make.

Future estimates come from professional analysts. Just like forecasting the weather, they don’t always get it right!
Annual Growth Rate
4.6%
Expected annual growth in earnings.
Earnings growth vs Low Risk Savings
Is Magellan Health expected to grow at an attractive rate?
  • Magellan Health's earnings growth is expected to exceed the low risk savings rate of 2.7%.
Growth vs Market Checks
  • Magellan Health's earnings growth is positive but not above the United States of America market average.
  • Magellan Health's revenue growth is positive but not above the United States of America market average.
Annual Growth Rates Comparison
Raw Data
NasdaqGS:MGLN Future Growth Rates Data Sources
Data Point Source Value (per year)
NasdaqGS:MGLN Future Earnings Growth Rate Line of Best Fit* through Consensus Estimate Earnings of 3 Analysts 4.6%
NasdaqGS:MGLN Future Revenue Growth Rate Line of Best Fit* through Consensus Estimate Revenue of 3 Analysts 1.9%
United States of America Healthcare Industry Earnings Growth Rate Market Cap Weighted Average 16.2%
United States of America Healthcare Industry Revenue Growth Rate Market Cap Weighted Average 7.8%
United States of America Market Earnings Growth Rate Market Cap Weighted Average 13.4%
United States of America Market Revenue Growth Rate Market Cap Weighted Average 7.1%

*Line of best fit is calculated by linear regression .

Industry and Market average data is calculated daily.

Learn more about our growth rate calculations in Simply Wall St’s analysis model.

Analysts growth expectations
Raw Data
NasdaqGS:MGLN Analysts Growth Expectations Data Sources
Data Point Source Value
Past Financials Company Filings (4 months ago) See Below
Future Estimates Average of up to 3 Analyst Estimates (S&P Global) See Below
All numbers in USD Millions and using Trailing twelve months (TTM) annual period rather than quarterly.
NasdaqGS:MGLN Future Estimates Data
Date (Data in USD Millions) Revenue Cash Flow Net Income * Avg. No. Analysts
2021-12-31 7,897 242 108 1
2020-12-31 7,479 209 87 3
2019-12-31 7,248 180 65 3
2018-12-31 7,371 139 78 3
NasdaqGS:MGLN Past Financials Data
Date (Data in USD Millions) Revenue Cash Flow Net Income *
2018-09-30 7,164 84 107
2018-06-30 6,730 180 112
2018-03-31 6,338 274 104
2017-12-31 5,839 162 110
2017-09-30 5,408 187 91
2017-06-30 5,280 190 84
2017-03-31 5,025 67 82
2016-12-31 4,837 67 78
2016-09-30 4,842 -28 70
2016-06-30 4,740 -74 37
2016-03-31 4,733 81 37
2015-12-31 4,597 157 31

*GAAP earnings excluding extraordinary items.

Super high growth metrics
High Growth Checks
  • Magellan Health's earnings are expected to grow by 4.6% yearly, however this is not considered high growth (20% yearly).
  • Magellan Health's revenue is expected to grow by 1.9% yearly, however this is not considered high growth (20% yearly).
Past and Future Earnings per Share
The accuracy of the analysts who estimate the future performance data can be gauged below. We look back 3 years and see if they were any good at predicting what actually occurred. We also show the highest and lowest estimates looking forward to see if there is a wide range.
Raw Data
NasdaqGS:MGLN Past and Future Earnings per Share
Data Point Source Value
Past Financials Company Filings (4 months ago) See Below
Future Estimates Average of up to 3 Analyst Estimates (S&P Global) See Below

All data from Magellan Health Company Filings, last reported 4 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqGS:MGLN Future Estimates Data
Date (Data in USD Millions) EPS * EPS High Estimate EPS Low Estimate Avg. No. Analysts
2021-12-31 4.63 4.63 4.63 1.00
2020-12-31 3.77 3.90 3.57 3.00
2019-12-31 2.71 2.71 2.70 3.00
2018-12-31 3.11 3.12 3.11 3.00
NasdaqGS:MGLN Past Financials Data
Date (Data in USD Millions) EPS *
2018-09-30 4.39
2018-06-30 4.66
2018-03-31 4.39
2017-12-31 4.72
2017-09-30 3.95
2017-06-30 3.66
2017-03-31 3.58
2016-12-31 3.36
2016-09-30 2.99
2016-06-30 1.53
2016-03-31 1.53
2015-12-31 1.26

*GAAP earnings excluding extraordinary items.

Performance in 3 years
In the same way as past performance we look at the future estimated return (profit) compared to the available funds. We do this looking forward 3 years.
  • Magellan Health is not expected to efficiently use shareholders’ funds in the future (Return on Equity less than 20%).
X
Future performance checks
We assess Magellan Health's future performance by looking at:
  1. Is the annual earnings growth rate expected to beat the low risk savings rate, plus a premium to keep pace with inflation?
  2. Is the annual earnings growth rate expected to beat the average growth rate in earnings of the United States of America market? (1 check)
  3. Is the annual revenue growth rate expected to beat the average growth rate in revenue of the United States of America market? (1 check)
  4. Is the annual earnings growth rate expected to be above 20%? (1 check)
  5. Is the annual revenue growth rate expected to be above 20%? (1 check)
  6. Is the Return on Equity in 3 years expected to be over 20%? (1 check)
Some of the above checks will fail if the company is expected to be loss making in the relevant year.
Magellan Health has a total score of 1/6, see the detailed checks below.

Note 1: We use GAAP Net Income Excluding Exceptional Items for our Earnings in all our calculations.

Full details on the Future part of the Simply Wall St company analysis model.

Past Performance

  How has Magellan Health performed over the past 5 years?

The past performance of a company can be measured by how much growth it has experienced and how much profit it makes relative to the funds and assets it has available.
Past earnings growth
Below we compare Magellan Health's growth in the last year to its industry (Healthcare).
Past Earnings growth analysis
We also check if the company has grown in the past 5 years, and whether it has maintained that growth in the year.
  • Magellan Health's year on year earnings growth rate was negative over the past 5 years, however the most recent earnings are above average.
  • Magellan Health's 1-year earnings growth exceeds its 5-year average (17.4% vs -1.3%)
  • Magellan Health's earnings growth has not exceeded the US Healthcare industry average in the past year (17.4% vs 17.9%).
Earnings and Revenue History
Magellan Health's revenue and profit over the past 5 years is shown below, any years where they have experienced a loss will show up in red.
Raw Data

All data from Magellan Health Company Filings, last reported 4 months ago, and in Trailing twelve months (TTM) annual period rather than quarterly.

NasdaqGS:MGLN Past Revenue, Cash Flow and Net Income Data
Date (Data in USD Millions) Revenue Net Income * G+A Expenses R&D Expenses
2018-09-30 7,163.92 106.66
2018-06-30 6,729.82 111.96
2018-03-31 6,338.04 103.91
2017-12-31 5,838.58 110.21
2017-09-30 5,407.55 90.87
2017-06-30 5,280.28 83.93
2017-03-31 5,025.49 82.39
2016-12-31 4,836.88 77.88
2016-09-30 4,842.24 69.99
2016-06-30 4,740.19 36.68
2016-03-31 4,733.45 37.36
2015-12-31 4,597.40 31.41
2015-09-30 4,311.12 25.69
2015-06-30 4,044.20 60.63
2015-03-31 3,774.61 60.97
2014-12-31 3,760.12 79.40
2014-09-30 3,785.87 76.33
2014-06-30 3,736.30 96.43
2014-03-31 3,691.03 122.92
2013-12-31 3,546.32 125.26
2013-09-30 3,368.38 143.77
2013-06-30 3,293.22 162.80
2013-03-31 3,255.95 158.30
2012-12-31 3,207.40 151.03
2012-09-30 3,098.59 143.76
2012-06-30 2,986.99 108.86
2012-03-31 2,879.86 116.12

*GAAP earnings excluding extraordinary items.

Performance last year
We want to ensure a company is making the most of what it has available. This is done by comparing the return (profit) to a company's available funds, assets and capital.
  • Magellan Health has not efficiently used shareholders’ funds last year (Return on Equity less than 20%).
  • Magellan Health used its assets less efficiently than the US Healthcare industry average last year based on Return on Assets.
  • Magellan Health's use of capital deteriorated last year versus 3 years ago (Return on Capital Employed).
X
Past performance checks
We assess Magellan Health's performance over the past 5 years by checking for:
  1. Has earnings increased in past 5 years? (1 check)
  2. Has the earnings growth in the last year exceeded that of the Healthcare industry? (1 check)
  3. Is the recent earnings growth over the last year higher than the average annual growth over the past 5 years? (1 check)
  4. Is the Return on Equity (ROE) higher than 20%? (1 check)
  5. Is the Return on Assets (ROA) above industry average? (1 check)
  6. Has the Return on Capital Employed (ROCE) increased from 3 years ago? (1 check)
The above checks will fail if the company has reported a loss in the most recent earnings report. Some checks require at least 3 or 5 years worth of data.
Magellan Health has a total score of 1/6, see the detailed checks below.

Note: We use GAAP Net Income excluding extraordinary items in all our calculations.

Full details on the Past part of the Simply Wall St company analysis model.

Health

 How is Magellan Health's financial health and their level of debt?

A company's financial position is much like your own financial position, it includes everything you own (assets) and owe (liabilities).

The boxes below represent the relative size of what makes up Magellan Health's finances.

The net worth of a company is the difference between its assets and liabilities.
Net Worth
  • Magellan Health is able to meet its short term (1 year) commitments with its holdings of cash and other short term assets.
  • Magellan Health's cash and other short term assets cover its long term commitments.
Balance sheet
This treemap shows a more detailed breakdown of Magellan Health's finances. If any of them are yellow this indicates they may be out of proportion and red means they relate to one of the checks below.
Assets
Liabilities and shares
The 'shares' portion represents any funds contributed by the owners (shareholders) and any profits.
  • Low level of unsold assets.
  • Debt is covered by short term assets, assets are 2x debt.
Historical Debt
Nearly all companies have debt. Debt in itself isn’t bad, however if the debt is too high, or the company can’t afford to pay the interest on its debts this may have impacts in the future.

The graphic below shows equity (available funds) and debt, we ideally want to see the red area (debt) decreasing.

If there is any debt we look at the companies capability to repay it, and whether the level has increased over the past 5 years.
Raw Data

All data from Magellan Health Company Filings, last reported 4 months ago.

NasdaqGS:MGLN Past Debt and Equity Data
Date (Data in USD Millions) Total Equity Total Debt Cash & Short Term Investments
2018-09-30 1,331.75 798.75 232.24
2018-06-30 1,318.77 825.05 244.38
2018-03-31 1,305.13 798.19 288.35
2017-12-31 1,276.49 853.74 261.19
2017-09-30 1,207.41 764.77 480.52
2017-06-30 1,147.66 629.94 273.27
2017-03-31 1,135.97 636.34 286.58
2016-12-31 1,104.49 618.38 292.43
2016-09-30 1,044.96 537.81 233.79
2016-06-30 1,089.27 476.69 236.29
2016-03-31 1,093.04 254.54 146.91
2015-12-31 1,072.12 257.31 160.22
2015-09-30 1,083.45 262.30 197.77
2015-06-30 1,162.67 265.22 270.60
2015-03-31 1,169.85 267.86 344.42
2014-12-31 1,139.52 269.84 346.86
2014-09-30 1,151.66 274.35 390.79
2014-06-30 1,179.82 24.86 194.71
2014-03-31 1,185.44 25.61 291.84
2013-12-31 1,167.04 26.73 261.40
2013-09-30 1,118.73 27.01 354.98
2013-06-30 1,053.43 27.51 281.93
2013-03-31 1,031.79 28.42 312.51
2012-12-31 1,017.33 0.00 302.26
2012-09-30 992.99 0.00 277.44
2012-06-30 904.71 0.00 239.53
2012-03-31 872.73 0.00 202.67
  • Magellan Health's level of debt (60%) compared to net worth is high (greater than 40%).
  • The level of debt compared to net worth has increased over the past 5 years (2.4% vs 60% today).
  • Debt is not well covered by operating cash flow (10.5%, less than 20% of total debt).
  • Interest payments on debt are well covered by earnings (EBIT is 6.5x coverage).
X
Financial health checks
We assess Magellan Health's financial health by checking for:
  1. Are short term assets greater than short term liabilities? (1 check)
  2. Are short term assets greater than long term liabilities? (1 check)
  3. Has the debt to equity ratio increased in the past 5 years? (1 check)
  4. Is the debt to equity ratio over 40%? (1 check)
  5. Is the debt covered by operating cash flow? (1 check)
  6. Are earnings greater than 5x the interest on debt (if company pays interest at all)? (1 check)
  7. Magellan Health has a total score of 3/6, see the detailed checks below.
For companies that are loss making and have been so on average in the past we replace the last 2 checks with:
  1. Does cash and short term investments cover stable operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)
  2. Does cash and short term investments cover growing operating expenses (recurring G&A and R&D) for more than 3 years? (1 check)


Full details on the Health part of the Simply Wall St company analysis model.

Dividends

 What is Magellan Health's current dividend yield, its reliability and sustainability?

Dividends are regular cash payments to you from the company, similar to a bank paying you interest on a savings account.
Annual Dividend Income
Dividend payments
0%
Current annual income from Magellan Health dividends.
If you bought $2,000 of Magellan Health shares you are expected to receive $0 in your first year as a dividend.
Dividend Amount
Here we look how much dividend is being paid, if any. Is it above what you can get in a savings account? It is up there with the best dividend paying companies?
  • Unable to evaluate Magellan Health's dividend yield against the bottom 25% of dividend payers as the company has not reported any payouts.
  • Unable to evaluate Magellan Health's dividend against the top 25% market benchmark as the company has not reported any payouts.
Annualized Historical and Future Dividends
It is important to see if the dividend for a company is stable, and not wildly increasing/decreasing each year. This graph shows you the historical rate to count toward your assessment of the stock.

We also check to see if the dividend has increased in the past 10 years.
Raw Data
NasdaqGS:MGLN Annualized Past and Future Dividends
Data Point Source Value
Past Annualized Dividend Yield S&P Global Market Data See Below
Past Dividends per Share Company Filings/ Annualized Dividend Payments See Below
Future Dividends per Share Estimates Average of up to 3 Analyst Estimates (S&P Global) See Below
United States of America Healthcare Industry Average Dividend Yield Market Cap Weighted Average of 23 Stocks 1.4%
United States of America Market Average Dividend Yield Market Cap Weighted Average of 1997 Stocks 2.5%
United States of America Minimum Threshold Dividend Yield 10th Percentile 0.8%
United States of America Bottom 25% Dividend Yield 25th Percentile 1.4%
United States of America Top 25% Dividend Yield 75th Percentile 3.6%

Industry and Market average data is calculated daily.

Note all dividend per share amounts are annualized and not quarterly or other period.

NasdaqGS:MGLN Future Dividends Estimate Data
Date (Data in $) Dividend per Share (annual) Avg. No. Analysts
2021-12-31
2020-12-31
2019-12-31
2018-12-31

Learn more about our ratios and growth rates in Simply Wall St’s analysis model >

  • Unable to perform a dividend volatility check as Magellan Health has not reported any payouts.
  • Unable to verify if Magellan Health's dividend has been increasing as the company has not reported any payouts.
Current Payout to shareholders
What portion of Magellan Health's earnings are paid to the shareholders as a dividend.
  • Unable to calculate sustainability of dividends as Magellan Health has not reported any payouts.
Future Payout to shareholders
  • Insufficient estimate data to determine if a dividend will be paid in 3 years and that it will be sustainable.
X
Income/ dividend checks
We assess Magellan Health's dividend by checking for:
  1. Firstly is the company paying a notable dividend (greater than 0.8%) - if not then the rest of the checks are ignored.
  2. Is current dividend yield above the bottom 25% of dividend payers? (1 check)
  3. Is current dividend yield above the top 25% of dividend payers? (1 check)
  4. Have they paid a dividend for 10 years, and during this period has the dividend been volatile (drop of more than 25%)? (1 check)
  5. If they have paid a dividend for 10 years has it increased in this time? (1 check)
  6. How sustainable is the dividend, can Magellan Health afford to pay it from its earnings today and in 3 years (Payout ratio less than 90%)? (2 checks)
  7. Magellan Health has a total score of 0/6, see the detailed checks below.


Full details on the Dividends part of the Simply Wall St company analysis model.

Management

 What is the CEO of Magellan Health's salary, the management and board of directors tenure and is there insider trading?

Management is one of the most important areas of a company. We look at unreasonable CEO compensation, how long the team and board of directors have been around for and insider trading.
CEO
Barry Smith
COMPENSATION $7,434,946
AGE 64
TENURE AS CEO 6.1 years
CEO Bio

Mr. Barry M. Smith has been the Chief Executive Officer of Magellan Health, Inc. since January 1, 2013 and also serves as Chairman. Mr. Smith is responsible for Magellan's strategic direction and overall growth, as well as the development and operational execution of the Magellan's business strategy. He has been the Chief Executive Officer of Magellan Healthcare at Magellan Health, Inc. since December 28, 2018. He is the Founder, Chairman and Chief Executive Officer at Bon Travay, S.A. Mr. Smith joined Health Evolution Partners as on January 19, 2012 and focused on the services sector. He has more than 30 years of experience in the health care industry including leading transformational change and driving growth. He helped the Health Evolution Partners portfolio companies achieve commercial success. He is a veteran health care Chief Executive Officer with experience founding and leading health care companies, including hospice and pharmacy benefits management. He founded and served as the Chairman, Chief Executive Officer and President at Vista Care Services. From June 1990 to January 1996, Mr. Smith served as the Chairman and the Chief Executive Officer at Value Rx Inc. He served as a Member of the Portfolio Services Group and Operating Partner of Growth Buyout Fund at Health Evolution Partners Growth Fund L.P. He also previously served as chief executive officer and chairman of B&J Associates, Inc. and B&J Smith Investments, LLC. He was a Co-Founder of Keystone National Group, LLC and served as its Chairman. He served as a Vice President of Operations at PCS Health Systems Inc. from May 1988 to June 1990. Mr. Smith co-founded VistaCare Inc. in July 1995 and served as the Chief Executive Officer and the President until May 2001. From July 1981 to May 1988, he served in a variety of management positions in the Medical Products, Renal Care and Prescription Drug divisions of Baxter Healthcare Corporation. He serves as the Chairman of RG Capital and iNation. He is a Director of Halcyon Healthcare and Optimal Radiology. He also serves on the Board of Directors of Inpatient Consultants Inc. Mr. Smith has been a Director of Magellan Health Services Inc. since December 17, 2004. He served as the Chairman of Optimal IMX, Inc. since May 2012. He served as the Chairman of VistaCare, LLC from January 1996 to August 12, 2003. He has been a Director at The Ensign Group, Inc. since 2014. He served as lead director of CenseoHealth, the chairman of Optimal Radiology and the lead director of Halcyon Health Services. He served as a Director of IPC The Hospitalist Company, Inc. from 1998 to June 2008. He also serves on the Boards of the Ambassador's Council of Freedom from Hunger and VistaCare Foundation. He serves as a Member of the board of the Institute of Mental Health Research. He served as Director of VistaCare, LLC. He is on the Marriott School of Business National Leadership Council at Brigham Young University and is chairman of the Founders program at the school's Rollins Center of Entrepreneurship and Technology. Mr. Smith earned a B.A. Degree in Finance from the University of Utah.

CEO Compensation
  • Barry's compensation has been consistent with company performance over the past year.
  • Barry's remuneration is higher than average for companies of similar size in United States of America.
Management Team Tenure

Average tenure and age of the Magellan Health management team in years:

12.3
Average Tenure
55
Average Age
  • The average tenure for the Magellan Health management team is over 5 years, this suggests they are a seasoned and experienced team.
Management Team

Barry Smith

TITLE
Chairman . CEO & CEO of Magellan Healthcare
COMPENSATION
$7M
AGE
64
TENURE
6.1 yrs

Jon Rubin

TITLE
Chief Financial Officer
COMPENSATION
$2M
AGE
54
TENURE
10.4 yrs

Daniel Gregoire

TITLE
General Counsel & Secretary
COMPENSATION
$1M
AGE
62
TENURE
14.1 yrs

Mostafa Kamal

TITLE
Chief Executive Officer of Magellan Rx Management
COMPENSATION
$2M
AGE
37
TENURE
3.6 yrs

Renie Silver

TITLE
SVP - Corporate Finance

Srini? Koushik

TITLE
Chief Technology Officer
TENURE
3.1 yrs

Joe Bogdan

TITLE
Senior Vice President of Corporate Finance

Caskie Lewis-Clapper

TITLE
Chief Human Resources Officer
COMPENSATION
$1M
AGE
53
TENURE
15.1 yrs

Jay Youell

TITLE
Senior Vice President of Sales - Health Plan & Insurance Markets
TENURE
15.3 yrs

Jeff West

TITLE
Senior VP & Controller
AGE
56
TENURE
16.7 yrs
Board of Directors Tenure

Average tenure and age of the Magellan Health board of directors in years:

3.6
Average Tenure
54
Average Age
  • The tenure for the Magellan Health board of directors is about average.
Board of Directors

Michael Diament

TITLE
Director
COMPENSATION
$275K
AGE
49
TENURE
15.1 yrs

Barry Smith

TITLE
Chairman . CEO & CEO of Magellan Healthcare
COMPENSATION
$7M
AGE
64
TENURE
5.1 yrs

Eran Broshy

TITLE
Director
COMPENSATION
$268K
AGE
59
TENURE
10 yrs

G. MacKenzie

TITLE
Director
COMPENSATION
$245K
AGE
54
TENURE
2.3 yrs

William McBride

TITLE
Lead Director
COMPENSATION
$270K
AGE
73
TENURE
3.6 yrs

Perry Fine

TITLE
Director
COMPENSATION
$240K
AGE
65
TENURE
4.8 yrs

John Agwunobi

TITLE
Director
COMPENSATION
$245K
AGE
53
TENURE
1.7 yrs

Matt Simas

TITLE
Director
AGE
53
TENURE
0.8 yrs

Swati Abbott

TITLE
Director
AGE
54
TENURE
0.8 yrs
Who owns this company?
Recent Insider Trading
  • No 3 month insider trading information.
Recent Insider Transactions
Announced Type Name Entity Role Start End Shares Max Price ($) Value ($)
13. Dec 18 Sell Starboard Value LP Company 04. Dec 18 06. Dec 18 -250,000 $54.99 $-13,748,200
13. Dec 18 Buy Starboard Value LP Company 07. Nov 18 12. Dec 18 2,369,100 $64.45 $152,678,545
X
Management checks
We assess Magellan Health's management by checking for:
  1. Is the CEO's compensation unreasonable compared to market cap? (1 check)
  2. Has the CEO's compensation increased more than 20% whilst the EPS is down more then 20%? (1 check)
  3. Is the average tenure of the management team less than 2 years? (1 check)
  4. Is the average tenure of the board of directors team less than 3 years? (1 check)
  5. Magellan Health has a total score of 0/6, this is not included on the snowflake, see the detailed checks below.


Note: We use the top 6 management executives and board members in our calculations.

Note 2: Insider trading include any internal stakeholders and these transactions .

Full details on the Management part of the Simply Wall St company analysis model.

News

Simply Wall St News

What does Magellan Health, Inc.'s (NASDAQ:MGLN) Balance Sheet Tell Us About Its Future?

Investors are always looking for growth in small-cap stocks like Magellan Health, Inc. … However, an important fact which most ignore is: how financially healthy is the business? … Evaluating financial health as part of your investment thesis is

Simply Wall St -

Should We Be Cautious About Magellan Health, Inc.'s (NASDAQ:MGLN) ROE Of 8.0%?

Our data shows Magellan Health has a return on equity of 8.0% for the last year. … One way to conceptualize this, is that for each $1 of shareholders' equity it has, the company made $0.080 in profit. … Return on Equity = Net Profit ÷ Shareholders' Equity

Simply Wall St -

Why Magellan Health, Inc.’s (NASDAQ:MGLN) Return On Capital Employed Might Be A Concern

To be precise, we'll consider its Return On Capital Employed (ROCE), as that will inform our view of the quality of the business. … What is Return On Capital Employed (ROCE)? … ROCE measures the 'return' (pre-tax profit) a company generates from capital employed in its business.

Simply Wall St -

Investors Are Undervaluing Magellan Health Inc (NASDAQ:MGLN) By 28.99%

Does the December share price for Magellan Health Inc (NASDAQ:MGLN) reflect it's really worth? … by projecting its future cash flows and then discounting them to today's value. … Discounted Cash Flows (DCF).

Simply Wall St -

Does Magellan Health Inc's (NASDAQ:MGLN) Past Performance Indicate A Stronger Future?

When Magellan Health Inc's (NASDAQ:MGLN) announced its latest earnings (30 September 2018), I wanted to understand how these figures stacked up against its past performance. … The two benchmarks I used were Magellan Health's average earnings over the past couple of years, and its industry performance. … Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of -1.3%, indicating the rate at which MGLN is growing has accelerated

Simply Wall St -

What Investors Should Know About Magellan Health Inc's (NASDAQ:MGLN) Financial Strength

Magellan Health Inc (NASDAQ:MGLN) is a small-cap stock with a market capitalization of US$1.6b. … While investors primarily focus on the growth potential and competitive landscape of the small-cap companies, they end up ignoring a key aspect, which could be the biggest threat to its existence: its financial health. … So, understanding the company's financial health becomes

Simply Wall St -

Is Magellan Health Inc's (NASDAQ:MGLN) CEO Paid Enough To Stay Motivated?

This report will, first, examine the CEO compensation levels in comparison to CEO compensation at companies of similar size. … How Does Barry Smith's Compensation Compare With Similar Sized Companies. … It would therefore appear that Magellan Health Inc pays Barry Smith more than the median CEO remuneration at companies of a similar size, in the same market

Simply Wall St -

Why Magellan Health Inc (NASDAQ:MGLN) May Not Be As Efficient As Its Industry

Magellan Health Inc’s (NASDAQ:MGLN) most recent return on equity was a substandard 8.5% relative to its industry performance of 14.9% over the past year. … Though MGLN's recent performance is underwhelming, it is useful to understand what ROE is made up of and how it should be interpreted. … Knowing these components can change your views on MGLN's below-average returns.

Simply Wall St -

Investors Are Undervaluing Magellan Health Inc (NASDAQ:MGLN) By 36.8%

by taking the expected future cash flows and discounting them to their present value. … Discounted Cash Flows (DCF). … If you want to learn more about discounted cash flow, the basis for my calcs can be read in detail in the Simply Wall St analysis model

Simply Wall St -

What Do You Get For Owning Magellan Health Inc (NASDAQ:MGLN)?

and want to begin learning the link between Magellan Health Inc (NASDAQ:MGLN)’s return fundamentals and stock market performance. … Your equity share is granted in return for the capital provided to the business to operate, and in order for an investment to be successful the business has to create earnings from the funds that make up this capital. … Therefore, looking at how efficiently Magellan Health is able to use capital to create earnings will help us understand your potential return.

Simply Wall St -

Company Info

Map
Description

Magellan Health, Inc. provides healthcare management services in the United States. It operates in Healthcare and Pharmacy Management segments. The Healthcare segment offers carve-out management services for behavioral health; employee assistance plans (EAP); and other areas of specialty healthcare, including diagnostic imaging, musculoskeletal management, cardiac, and physical medicine for health plans, care organizations, and employers. It also contracts with local, state, and federal governmental agencies to provide services to recipients under Medicaid, Medicare, and other government programs, such as behavioral health and EAP, as well as healthcare management and long term support services through its network of medical and behavioral health professionals, clinics, hospitals, nursing facilities, home care agencies, and ancillary service providers. The Pharmacy Management segment comprises products and solutions that provide clinical and financial management of pharmaceuticals paid under medical and pharmacy benefit programs. This segment offers pharmacy benefit management services, pharmacy benefit administration for state Medicaid and other government sponsored programs, pharmaceutical dispensing services, clinical and formulary management programs, medical pharmacy management programs, and programs for the integrated management of specialty drugs that treat complex conditions. The company provides services to health plans and other managed care organizations, employers, labor unions, various military and governmental agencies, and third party administrators. Magellan Health, Inc. was founded in 1969 and is headquartered in Scottsdale, Arizona.

Details
Name: Magellan Health, Inc.
MGLN
Exchange: NasdaqGS
Founded: 1969
$1,540,197,199
24,255,074
Website: http://www.magellanhealth.com
Address: Magellan Health, Inc.
4800 North Scottsdale Road,
Suite 4400,
Scottsdale,
Arizona, 85251,
United States
Listings
Exchange Symbol Ticker Symbol Security Exchange Country Currency Listed on
NasdaqGS MGLN Ordinary Common Stock Nasdaq Global Select US USD 22. Jul 1992
DB MAH1 Ordinary Common Stock Deutsche Boerse AG DE EUR 22. Jul 1992
Number of employees
Current staff
Staff numbers
10,700
Magellan Health employees.
Industry
Managed Health Care
Healthcare
Company Analysis and Financial Data Status
Area Date (UTC time)
Company Analysis updated: 2019/02/14 00:01
End of day share price update: 2019/02/13 00:00
Last estimates confirmation: 2019/01/14
Last earnings filing: 2018/11/07
Last earnings reported: 2018/09/30
Last annual earnings reported: 2017/12/31


All dates and times in UTC. All financial data provided by Standard & Poor’s Capital IQ.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.