Fresenius Medical Care (NYSE: FMS) and Surgical Care Affiliates (NASDAQ:SCAI) are both healthcare companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, institutional ownership and profitability.

Dividends

Fresenius Medical Care pays an annual dividend of $0.37 per share and has a dividend yield of 0.8%. Surgical Care Affiliates does not pay a dividend. Fresenius Medical Care pays out 15.3% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Fresenius Medical Care and Surgical Care Affiliates’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fresenius Medical Care $17.91 billion 1.69 $1.24 billion $2.42 20.31
Surgical Care Affiliates N/A N/A N/A $0.86 64.97

Fresenius Medical Care has higher revenue and earnings than Surgical Care Affiliates. Fresenius Medical Care is trading at a lower price-to-earnings ratio than Surgical Care Affiliates, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Fresenius Medical Care and Surgical Care Affiliates’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fresenius Medical Care 7.04% 11.51% 5.00%
Surgical Care Affiliates 21.52% 13.07% 12.83%

Analyst Ratings

This is a summary of current ratings and recommmendations for Fresenius Medical Care and Surgical Care Affiliates, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fresenius Medical Care 0 2 4 0 2.67
Surgical Care Affiliates 0 2 0 0 2.00

Fresenius Medical Care currently has a consensus price target of $44.00, suggesting a potential downside of 10.46%. Surgical Care Affiliates has a consensus price target of $50.00, suggesting a potential downside of 10.51%. Given Fresenius Medical Care’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Fresenius Medical Care is more favorable than Surgical Care Affiliates.

Insider & Institutional Ownership

29.0% of Fresenius Medical Care shares are held by institutional investors. 3.3% of Surgical Care Affiliates shares are held 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.

Summary

Fresenius Medical Care beats Surgical Care Affiliates on 7 of the 12 factors compared between the two stocks.

Fresenius Medical Care Company Profile

Fresenius Medical Care AG & Co. KGaA is a kidney dialysis company. The Company provides dialysis care and related services to persons suffering from end-stage renal disease (ESRD), as well as other healthcare services. The Company’s segments include North America Segment, the Europe, Middle East and Africa (EMEA) Segment, the Asia-Pacific Segment and the Latin America Segment. The Company develops and manufactures a range of dialysis machines, systems and disposable products. As of December 31, 2016, the Company sold its products to customers in more than 120 countries and also used in its internal healthcare service operations. The Company’s Care Coordination services include coordinated delivery of pharmacy services, vascular, cardiovascular and endovascular specialty services, non-dialysis laboratory testing services, physician services, hospitalist and intensivist services, health plan services, ambulatory surgery center services and urgent care services.

Surgical Care Affiliates Company Profile

Surgical Care Affiliates, Inc. is a provider of solutions to physicians, health plans and health systems to optimize surgical care. The Company offers tools and systems in the areas of clinical benchmarking, clinical best practices, operating efficiency, care coordination and supply chain management. As of December 31, 2016, the Company operated a network of surgical facilities in the United States, which included 197 ambulatory surgery centers (ASCs) and seven surgical hospitals in partnership with approximately 3,000 physician partners. The Company’s operations consist of its ownership and management of ASCs and surgical hospitals. Its ASCs provide the facilities, equipment, supplies and clinical support staff necessary to provide non-emergency surgical services to patients not requiring hospitalization. Its surgical hospitals allow physicians to perform a range of surgical procedures, including surgeries, and allow patients to stay in the hospital for several nights to recover.

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