Teladoc Health (TDOC 4.15%) and Tesla (TSLA 3.91%) might seem to have no more in common than the first two letters of their names. However, they're both innovators in their respective markets. They're also two stocks that many investors follow closely.

Over the last 12 months, Tesla has been by far the bigger winner. The popular stock has soared more than 120%, while Teladoc's share price has plunged around 30%. Does that mean that Tesla is the smarter pick going forward?

I don't think so. Here are three reasons why Teladoc stock is a better buy than Tesla.

A person with pill bottles looking at a laptop showing a smiling physician.

Image source: Getty Images.

1. Valuation

Neither Teladoc nor Tesla are by any means bargains. However, Tesla's more impressive gains of late have driven its valuation to truly nosebleed levels.

Tesla's shares currently trade at nearly 170 times expected earnings. But Tesla's profits so far have come mainly from selling renewable energy credits and digital assets (i.e., Bitcoin.)

On the other hand, Teladoc remains unprofitable, so we can't use earnings-based valuation metrics for the stock. We can, though, use price-to-sales (P/S) ratios for both Teladoc and Tesla.

Teladoc's P/S multiple is nearly 12.6. While that's high, it's a lot lower than Tesla's P/S ratio of 21.3. 

2. Growth prospects

The consensus one-year price target for Teladoc reflects an upside potential of more than 50%. Wall Street analysts aren't so bullish about Tesla. The average price target for the stock is a little lower than the current share price. One analyst predicts that Tesla's share price could plunge nearly 90%.

Of course, the analysts are focused on the relatively near term. How do Teladoc and Tesla stack up against each other based on long-term growth prospects? I think Teladoc still comes out on top.

Some experts predict that in the future, autonomous vehicles will reduce the overall number of cars sold each year. If they're right, that means Tesla's total addressable market will eventually contract rather than expand.

Of course, Tesla will still have strong growth prospects by flipping owners of gasoline-powered vehicles to electric vehicles. However, it will also have intensified competition (more on that subject to follow.)

Meanwhile, McKinsey & Company projects that the virtual-care market will grow to $250 billion annually in the U.S. alone. Teladoc is the leader in this market but will probably generate revenue of only around $2 billion this year. The company should have tremendous long-term growth prospects both in the U.S. and in international markets.

3. Moat

Tesla deserves all of the accolades that it's received for driving innovation in electric vehicle and battery technology. The problem is that the company's success has attracted the attention of rivals in a major way.

While Tesla remains the market leader, its competitors continue to gain momentum. General Motors' Chevrolet Bolt is the No. 3 best-selling electric vehicle so far this year, with Ford's Mustang Mach-E coming in fourth place.

Tesla could face even bigger headaches in China from NIO, XpengAutomotive, and Li Auto. It won't be easy for the company to fend off rivals. Tesla has cut the prices on its vehicles, but that's certainly not a sign of a strong moat.

Teladoc also has competition. Amazon.com is the latest to jump into the telehealth market. So far, though, Teladoc hasn't been very worried about Amazon.

Teladoc's customer base already includes more than 40% of the Fortune 500 companies with over 50 U.S. health plans. Its platform offers more services than any of its rivals. And its members seem to love Teladoc, based on its Net Promoter Score (NPS) of more than 60. Any NPS score over 50 is considered to be excellent.

Overall, Teladoc appears to be in a stronger position to defend its turf than Tesla is. With the virtual-care leader's more attractive valuation and strong growth prospects factored in, as well, I think the stock is the better pick for investors right now.