Select Medical Holdings Corporation (NYSE: SEM) and HealthStream (NASDAQ:HSTM) are both medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, valuation, risk, analyst recommendations, earnings, dividends and profitability.

Insider & Institutional Ownership

78.3% of Select Medical Holdings Corporation shares are owned by institutional investors. Comparatively, 76.7% of HealthStream shares are owned by institutional investors. 19.9% of Select Medical Holdings Corporation shares are owned by insiders. Comparatively, 21.1% of HealthStream shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation and Earnings

This table compares Select Medical Holdings Corporation and HealthStream’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Select Medical Holdings Corporation $4.29 billion 0.54 $115.41 million $0.73 23.77
HealthStream $225.97 million 3.34 $3.75 million $0.18 131.34

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

Volatility & Risk

Select Medical Holdings Corporation has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500. Comparatively, HealthStream has a beta of 0.93, meaning that its share price is 7% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for Select Medical Holdings Corporation and HealthStream, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Select Medical Holdings Corporation 1 1 4 0 2.50
HealthStream 0 4 2 0 2.33

Select Medical Holdings Corporation currently has a consensus price target of $19.60, suggesting a potential upside of 12.97%. HealthStream has a consensus price target of $24.40, suggesting a potential upside of 3.21%. Given Select Medical Holdings Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Select Medical Holdings Corporation is more favorable than HealthStream.

Profitability

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

Net Margins Return on Equity Return on Assets
Select Medical Holdings Corporation 2.21% 11.44% 2.03%
HealthStream 2.36% 2.46% 1.79%

Summary

Select Medical Holdings Corporation beats HealthStream on 10 of the 14 factors compared between the two stocks.

Select Medical Holdings Corporation Company Profile

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.

HealthStream Company Profile

HealthStream, Inc. (HealthStream) provides workforce, patient experience and provider solutions for healthcare organizations. The Company operates in three segments: HealthStream Workforce Solutions, HealthStream Patient Experience Solutions and HealthStream Provider Solutions. HealthStream’s products and services are organized into three segments: Workforce Solutions, Patient Experience Solutions, and Provider Solutions. HealthStream’s solutions are provided to a range of customers within the healthcare industry across the continuum of care. Delivered primarily as Software-as-a-Service (SaaS), the Company’s solutions focus on challenges facing the healthcare workforce and healthcare organizations, including the need to manage, retain, engage and develop healthcare workforce talent; meet compliance requirements; manage ongoing medical staff credentialing and privileging processes, and deliver patient experiences of care in healthcare organizations.

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