It could take a while before there's a safe and effective vaccine for COVID-19. Antiviral drugs could help in treating the novel coronavirus disease but they won't provide a magic bullet. No matter what happens, though, testing for COVID-19 will be important.

Two of the largest diagnostics testing companies in the world, Quest Diagnostics (NYSE:DGX) and LabCorp (NYSE:LH), have stepped up in a major way to provide COVID-19 testing. But which of these coronavirus-focused diagnostics stocks is the better pick for long-term investors?

Hand holding a vial of blood with a label indicating a positive test for coronavirus

Image source: Getty Images.

The case for Quest Diagnostics

Quest Diagnostics launched nationwide COVID-19 testing services in March. More recently, the company introduced a COVID-19 antibody test for consumers to use at home. The test can be bought online for $119.

You might think that the COVID-19 pandemic has caused Quest's business to boom -- but it hasn't. While Quest topped Wall Street estimates in the first quarter, the company's total testing volume declined more than 40% during the last two weeks of March due to the viral outbreak. The problem was that many patients held off on visiting physicians, causing the overall number of tests to plunge, even with an increased number of COVID-19 tests.

However, this should only be a temporary issue for Quest. With many states slowly relaxing restrictions imposed because of the pandemic, the company's overall testing volumes should rebound over time.

Look for Quest to continue driving higher growth through acquisitions. CEO Steve Rusckowski said in the company's Q1 conference call last month that Quest had several deals in the works that it was close to announcing before the COVID-19 pandemic. Those transactions are on hold for now, but he expects discussions to pick back up in Q3. Rusckowki also mentioned that the challenges that small regional labs are having could open opportunities to tuck-in acquisitions.

Wall Street analysts project that Quest will grow its earnings by an average of nearly 5% annually over the next five years. Industry consolidation holds the potential for Quest to deliver stronger growth than expected. In the meantime, the company pays a dividend that yields over 2%. 

The case for LabCorp

There's a similar story for LabCorp. Like Quest, LabCorp began offering COVID-19 testing in early March. LabCorp also launched an at-home COVID-19 diagnostics test and recently rolled out a COVID-19 antibody test.

LabCorp got off to a great start in the first quarter of 2020. However, the company's testing volume fell at the end of the quarter even more than Quest's did, plummeting by at least 50% from typical levels. While LabCorp still managed to beat Wall Street estimates in Q1, its reported earnings declined from the prior-year period due to the COVID-19 pandemic.

The same dynamics at work for Quest Diagnostics apply to LabCorp. As physicians' offices and clinics resume business at more normal levels and hospitals move beyond crisis mode, testing volumes will increase. Expanded testing for COVID-19 should boost overall volumes even more.

Acquisitions have been a key component of LabCorp's strategy and fueled most of the company's Q1 revenue growth. However, the company's management seems to be less motivated to make deals in the near term. CFO Glenn Eisenberg stated in LabCorp's Q1 conference call that while the company will look at future acquisition opportunities, it will do so "with a heightened threshold as we focus on liquidity."

Analysts think that LabCorp will be able to generate average annual earnings growth of around 6.5% over the next five years, irrespective of potential acquisitions. Unlike Quest, though, the company doesn't offer a dividend to boost its total return.

Better coronavirus stock

Quest Diagnostics and LabCorp are practically twins. The companies have similar market caps and their businesses are a lot alike. Their cash positions are close to the same. So what's different enough to choose between these two stocks?

LabCorp's revenue is significantly higher than Quest's, but so is its debt. LabCorp's growth prospects are a little higher if you believe Wall Street estimates. But Quest's total return could be higher with its dividend thrown into the mix.

I think that LabCorp probably deserves an ever-so-slight nod over Quest because of its lower valuation based on its price-to-sales ratio. However, my view is that neither of these healthcare stocks is a buy right now.

There are several other stocks that offer greater growth prospects, including some with promising COVID-19 programs. If you're looking for an attractive coronavirus stock, my opinion is that it's best to look elsewhere.

Editor's note: This article has been updated to reflect LabCorp's recent launch of a COVID-19 antibody test.