Tenet Healthcare Corporation (NYSE: THC) and Select Medical Holdings Corporation (NYSE:SEM) are both medical companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, profitability, institutional ownership, risk, analyst recommendations and earnings.

Profitability

This table compares Tenet Healthcare Corporation and Select Medical Holdings Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tenet Healthcare Corporation -0.97% -2.00% -0.09%
Select Medical Holdings Corporation 1.95% 9.61% 1.84%

Insider & Institutional Ownership

79.0% of Select Medical Holdings Corporation shares are owned by institutional investors. 3.1% of Tenet Healthcare Corporation shares are owned by company insiders. Comparatively, 19.9% of Select Medical Holdings Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Tenet Healthcare Corporation has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500. Comparatively, Select Medical Holdings Corporation has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings for Tenet Healthcare Corporation and Select Medical Holdings Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tenet Healthcare Corporation 0 10 5 0 2.33
Select Medical Holdings Corporation 1 2 3 0 2.33

Tenet Healthcare Corporation presently has a consensus target price of $20.31, suggesting a potential upside of 57.30%. Select Medical Holdings Corporation has a consensus target price of $18.80, suggesting a potential upside of 3.01%. Given Tenet Healthcare Corporation’s higher probable upside, equities analysts clearly believe Tenet Healthcare Corporation is more favorable than Select Medical Holdings Corporation.

Earnings and Valuation

This table compares Tenet Healthcare Corporation and Select Medical Holdings Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Tenet Healthcare Corporation $19.32 billion 0.07 $2.07 billion ($1.95) -6.62
Select Medical Holdings Corporation $4.26 billion 0.57 $474.80 million $0.64 28.52

Tenet Healthcare Corporation has higher revenue and earnings than Select Medical Holdings Corporation. Tenet Healthcare Corporation is trading at a lower price-to-earnings ratio than Select Medical Holdings Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Select Medical Holdings Corporation beats Tenet Healthcare Corporation on 8 of the 12 factors compared between the two stocks.

About Tenet Healthcare Corporation

Tenet Healthcare Corporation (Tenet) is a healthcare services company. The Company operates regionally focused, integrated healthcare delivery networks in large urban and suburban markets in the United States. The Company’s segments include Hospital Operations and Other, Ambulatory Care and Conifer. As of December 31, 2016, its subsidiaries operated 79 hospitals, including three academic medical centers, two children’s hospitals, two specialty hospitals and one critical access hospital. The Company’s Ambulatory Care segment includes the operations of its USPI joint venture and its Aspen facilities. As of December 31, 2016, Conifer provided one or more of the business process services described above from 20 service centers to more than 800 Tenet and non-Tenet hospital and other clients in over 40 states. As of December 31, 2016, the Company operated 20 short-stay surgical hospitals, over 470 outpatient centers, and nine facilities in the United Kingdom.

About Select Medical Holdings Corporation

Select Medical Holdings Corporation is an operator of specialty hospitals, outpatient rehabilitation clinics and occupational medicine centers in the United States. The Company’s segments include specialty hospitals, outpatient rehabilitation, Concentra and Other. The specialty hospitals segment consists of hospitals designed to serve the needs of long term acute patients and hospitals designed to serve patients that require intensive medical rehabilitation care. The outpatient rehabilitation segment consists of clinics that provide physical, occupational, and speech rehabilitation services. The Concentra segment consists of medical centers and contract services provided at employer worksites and Department of Veterans Affairs community-based outpatient clinics (CBOCs) that deliver occupational medicine, physical therapy, veteran’s healthcare, and consumer health services. As of December 31, 2016, the Company had operations in 46 states and the District of Columbia.

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