The Health Care Fortune 500 - The Menges Group
[Pages:11]The Health Care Fortune 500
5 Slide Series, Volume 57 February, 2018
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Background
? Fortune groups companies into 21 sectors. ? This edition of the 5 Slide Series analyzes the 2017 health care sector Fortune 500
companies, as well as CVS, Walgreens, Rite Aid, and McKesson, for a total of 46 companies. ? We analyzed the companies by revenue rank, profit rank, revenues, profit, and percentage profit margin. The 2017 Fortune 500 list is based on CY2016 company performance data.
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Current (2017) Fortune 500 Companies by Business Sector
Category Technology Hotels, Restaurants & Leisure Food, Beverages & Tobacco Business Services Media Financials Household Products Apparel Telecommunications Chemicals Transportation Industrials Aerospace & Defense Health Care Motor Vehicles & Parts Engineering & Construction Retailing Materials Wholesalers Food & Drug Stores Energy Total
Number of Companies
43 10 24 20 11 84 12 5 10 14 17 19 12 46 9 13 47 19 23 5 57 500
CY2016
CY2016
Revenue (in Profits (in
$1,000,000s) $1,000,000s)
$1,257,589 $177,901
$121,189 $14,511
$472,806 $56,308
$194,685 $23,107
$180,767 $20,035
$2,067,607 $228,461
$180,846 $19,804
$66,254
$6,319
$459,978 $41,273
$188,667 $15,918
$354,733 $28,395
$418,359 $32,826
$338,302 $25,120
$1,954,210 $115,638
$392,466 $17,276
$124,682 $5,072
$1,383,281 $46,614
$169,755 $5,177
$311,683 $5,431
$241,598 $4,184
$1,176,417 $371
$12,055,874 $889,740
CY2016 Profit Margin 14.1% 12.0% 11.9% 11.9% 11.1% 11.0% 11.0% 9.5% 9.0% 8.4% 8.0% 7.8% 7.4% 5.9% 4.4% 4.1% 3.4% 3.0% 1.7% 1.7% 0.0% 7.4%
? The health care sector represented 9.2% of the Fortune 500 companies, 16.2% of the Fortune 500 companies' CY2016 revenues, and 13.0% of the Fortune 500 companies' profits.
? Health care companies have become more prominent within the Fortune 500 list. The health care industry had 46 Fortune 500 firms during 2017, as compared with 44 during 2010 and 36 during 2000. In 2017, seven health care companies were in the top 25 versus four in 2010 and zero in 2000.
? Collectively, the 46 health care companies earned a 5.9% profit margin during CY2016, whereas the entire Fortune 500 group earned a collective profit margin of 7.4%.
? The top 3 Fortune 500 companies in terms of profit margin during CY2016 were eBay (a technology firm at 80%), Altria Group (a tobacco company at 74%), and Baxter International (a health care company at 49%).
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Fortune 500 Health Care Companies by Industry
Category Pharmaceuticals Medical Products and Equipment Health Care: Pharmacy and Other Services Health Care: Insurance and Managed Care Food and Drug Stores Health Care: Medical Facilities Wholesalers: Health Care Grand Total
CY2016
CY2016
Number of Revenue (in Profits (in
Companies $1,000,000s) $1,000,000s)
10
$306,867 $67,748
7
$76,898 $10,375
5
$301,849 $10,214
8
$499,645 $15,095
2
$148,088 $4,339
8
$133,130 $1,953
6
$487,733 $5,916
46
$1,954,210 $115,638
CY2016 Profit Margin 22.1% 13.5% 3.4% 3.0% 2.9% 1.5% 1.2% 5.9%
? The ten pharmaceutical companies represented the largest subcategory of health care companies in the 2017 Fortune 500. These companies had a collective profit margin of 22% and accounted for more than half of the total profits of Fortune 500 health care companies.
? Insurance and managed care companies captured the largest CY2016 revenues among the Fortune 500 health care companies.
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Insurance and Managed Care
Category/Company Name Health Care: Insurance and Managed Care
UnitedHealth Group Anthem Aetna Humana Centene Cigna Molina Healthcare WellCare Health Plans
Fortune's Rank
6 29 43 53 66 70 156 195
Rank by Profit
33 91 100 266 283 122 431 372
CY2016 Revenue (in $1,000,000s)
$499,645 $184,840 $84,863 $63,155 $54,379 $40,721 $39,668 $17,782 $14,237
CY2016 Profits (in
$1,000,000s) $15,095 $7,017 $2,470 $2,271 $614 $562 $1,867 $52 $242
CY2016 Profit Margin 3.0% 3.8% 2.9% 3.6% 1.1% 1.4% 4.7% 0.3% 1.7%
? The eight Fortune 500 health insurance companies were all in the top 200, with six in the top 70. ? UnitedHealth Group (Fortune #6) had more than twice the CY2016 revenue as the next largest
health insurance company (Anthem at Fortune #29). These two companies were the only health insurance companies among the top 100 in terms of CY2016 profits. ? All eight companies earned a positive profit margin during CY2016, with the highest being Cigna (4.7%). Collectively, the eight health insurance companies earned an average profit of 3.0%.
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Pharmaceuticals
Category/Company Name Pharmaceuticals
Johnson & Johnson Pfizer Merck Gilead Sciences AbbVie Amgen Eli Lilly Bristol-Myers Squibb Biogen Celgene
Fortune's Rank
35 54 69 92 111 123 132 147 248 254
Rank by Profit
8 32 61 12 40 29 82 53 65 116
CY2016 Revenue (in $1,000,000s)
$306,867 $71,890 $52,824 $39,807 $30,390 $25,638 $22,991 $21,222 $19,427 $11,449 $11,229
CY2016 Profits (in
$1,000,000s) $67,748 $16,540 $7,215 $3,920 $13,501 $5,953 $7,722 $2,738 $4,457 $3,703 $1,999
CY2016 Profit Margin 22.1% 23.0% 13.7% 9.8% 44.4% 23.2% 33.6% 12.9% 22.9% 32.3% 17.8%
? The 10 pharmaceutical companies in the Fortune 500 had the highest collective average profit margin across the health care industry during CY2016 (22.1%).
? Gilead Sciences earned the highest profit margin among these firms (44.4%), driven by their Hepatitis C drugs. The lowest profit margin among these ten companies during CY2016 (Merck at 9.8%) earned a larger profit margin than all Fortune 500 firms collectively earned.
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Pharmacy and Other Services
Category/Company Name Health Care: Pharmacy and Other Services
CVS Health Walgreens Boots Alliance Express Scripts Holding Rite Aid Laboratory Corp. of America Quest Diagnostics Quintiles IMS Holdings
Fortune's Rank
7 17 22 91 290 366 390
Rank by Profit
44 58 72 400 238 260 415
CY2016 Revenue (in $1,000,000s)
$449,937 $177,526 $117,351 $100,288 $30,737 $9,642 $7,515 $6,878
CY2016 Profits (in
$1,000,000s) $14,552 $5,317 $4,173 $3,404 $166 $732 $645 $115
CY2016 Profit Margin 3.2% 3.0% 3.6% 3.4% 0.5% 7.6% 8.6% 1.7%
? CVS (Fortune #7) was the largest company in the Pharmacy and Other Services category and had the largest CY2016 profits ($5.3 billion) in this subgroup.
? Quest Diagnostics (Fortune #366) had the largest percentage profit margin among this subgroup during CY2016 (8.6%). The other diagnostics firm in this group, LabCorp, also had a strong profit margin (7.6%).
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Medical Facilities
Category/Company Name Health Care: Medical Facilities
HCA Holdings Community Health Systems Tenet Healthcare DaVita Universal Health Services LifePoint Health Kindred Healthcare Genesis Healthcare
Fortune's Rank
63 130 134 181 276 374 376 454
Rank by Profit
79 490 452 217 245 410 478 443
CY2016 Revenue (in $1,000,000s)
$133,130 $44,747 $21,374 $21,070 $15,197 $10,508 $7,274 $7,227 $5,733
CY2016 Profits (in
$1,000,000s) $1,953 $2,890 -$1,721 -$192 $880 $702 $122 -$664 -$64
CY2016 Profit Margin 1.5% 6.5% -8.1% -0.9% 5.8% 6.7% 1.7% -9.2% -1.1%
? HCA Holdings (Fortune #63) was the only medical facility company in the top 100.
? 4 of the 8 Medical Facility companies in the Fortune 500 lost money during CY2016.
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