Premier (NASDAQ: PINC) and Quorum Health Corporation (NYSE:QHC) are both small-cap medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, risk, institutional ownership, earnings and analyst recommendations.

Valuation & Earnings

This table compares Premier and Quorum Health Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Premier $1.35 billion 1.26 $395.31 million $0.07 470.64
Quorum Health Corporation $2.12 billion 0.06 $90.00 million N/A N/A

Premier has higher revenue, but lower earnings than Quorum Health Corporation.

Institutional & Insider Ownership

88.4% of Quorum Health Corporation shares are held by institutional investors. 17.1% of Premier shares are held by company insiders. Comparatively, 4.7% of Quorum Health Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and target prices for Premier and Quorum Health Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Premier 1 0 12 0 2.85
Quorum Health Corporation 1 4 0 0 1.80

Premier currently has a consensus price target of $38.80, suggesting a potential upside of 17.79%. Quorum Health Corporation has a consensus price target of $4.13, suggesting a potential downside of 3.17%. Given Premier’s stronger consensus rating and higher probable upside, research analysts clearly believe Premier is more favorable than Quorum Health Corporation.

Risk & Volatility

Premier has a beta of 0.46, indicating that its stock price is 54% less volatile than the S&P 500. Comparatively, Quorum Health Corporation has a beta of 9.5, indicating that its stock price is 850% more volatile than the S&P 500.

Profitability

This table compares Premier and Quorum Health Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Premier 31.41% -13.95% 10.48%
Quorum Health Corporation -7.13% -61.90% -6.46%

Summary

Premier beats Quorum Health Corporation on 9 of the 12 factors compared between the two stocks.

Premier Company Profile

Premier, Inc. is a healthcare improvement company. The Company is uniting an alliance of approximately 3,750 United States hospitals and more than 130,000 other provider organizations to transform healthcare. The Company operates healthcare group purchasing organizations and also provides integrated data and analytics, supply chain solutions, advisory services, performance improvement collaborative and other services. The Company plays a role in the healthcare industry, collaborating with members to co-develop long-term innovations that reinvent and improve the way care is delivered to patients nationwide.

Quorum Health Corporation Company Profile

Quorum Health Corporation is an operator and manager of general acute care hospitals and outpatient services in the United States. The Company operates in two segments: Hospital operations, which includes its general acute care hospitals and related healthcare entities that provide inpatient and outpatient healthcare services, and hospital management advisory and consulting services, which includes Quorum Health Resources, LLC (QHR). It operates QHR, which is a hospital management advisory and consulting services that provides services to non-affiliated general acute care hospitals. Its hospitals and its affiliated businesses offer services, such as general acute care, emergency room, general and specialty surgery and rehabilitation services. On April 1, 2016, Community Health Systems, Inc. announced that its board of directors has approved the distribution to its stockholders of 100% of the common stock of a new, independent publicly traded company, Quorum Health Corporation.

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