Critical Analysis: Capital Senior Living (CSU) vs. Five Star Quality Care (FVE)
Capital Senior Living (NYSE: CSU) and Five Star Quality Care (NASDAQ:FVE) are both small-cap medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, risk and profitability.
Volatility and Risk
Capital Senior Living has a beta of 1.62, suggesting that its share price is 62% more volatile than the S&P 500. Comparatively, Five Star Quality Care has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500.
This is a summary of recent recommendations and price targets for Capital Senior Living and Five Star Quality Care, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Capital Senior Living||0||1||1||0||2.50|
|Five Star Quality Care||0||0||2||0||3.00|
Capital Senior Living currently has a consensus price target of $18.00, indicating a potential upside of 20.24%. Five Star Quality Care has a consensus price target of $3.88, indicating a potential upside of 158.33%. Given Five Star Quality Care’s stronger consensus rating and higher probable upside, analysts clearly believe Five Star Quality Care is more favorable than Capital Senior Living.
Institutional and Insider Ownership
97.8% of Capital Senior Living shares are held by institutional investors. Comparatively, 21.3% of Five Star Quality Care shares are held by institutional investors. 19.8% of Capital Senior Living shares are held by insiders. Comparatively, 39.8% of Five Star Quality Care shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.
This table compares Capital Senior Living and Five Star Quality Care’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Capital Senior Living||-10.37%||-8.97%||-0.74%|
|Five Star Quality Care||-1.83%||-18.10%||-5.59%|
Valuation and Earnings
This table compares Capital Senior Living and Five Star Quality Care’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Capital Senior Living||$447.45 million||1.02||-$28.01 million||($1.66)||-9.02|
|Five Star Quality Care||$1.38 billion||0.05||-$21.81 million||($0.51)||-2.94|
Five Star Quality Care has higher revenue and earnings than Capital Senior Living. Capital Senior Living is trading at a lower price-to-earnings ratio than Five Star Quality Care, indicating that it is currently the more affordable of the two stocks.
Five Star Quality Care beats Capital Senior Living on 8 of the 13 factors compared between the two stocks.
Capital Senior Living Company Profile
Capital Senior Living Corporation is an operator of senior housing communities in the United States. The Company provides senior living services to the elderly, including independent living and assisted living services, and provides home care services at one of its communities. Its continuum of care integrates independent living and assisted living and is bridged by home care through independent home care agencies or its home care agency, sustains residents’ autonomy and independence based on their physical and mental abilities. As of December 31, 2016, it operated 129 senior housing communities in 23 states with an aggregate capacity of approximately 16,500 residents, including 79 senior housing communities, which it owned and 50 senior housing communities it leased. As of December 31, 2016, it also operated one home care agency. It offers assisted living care and services, including personal care services, around the clock staffing, support services and supplemental services.
Five Star Quality Care Company Profile
Five Star Senior Living Inc., formerly Five Star Quality Care, Inc., operates senior living communities, including independent living communities, assisted living communities and skilled nursing facilities (SNFs). The Company’s segments include senior living communities and rehabilitation and wellness. In the senior living communities segment, the Company operates for its own account or manage for the account of others independent living communities, assisted living communities and SNFs that are subject to centralized oversight and provide housing and services to elderly residents. In the rehabilitation and wellness segment, the Company provides services in the inpatient setting and in outpatient clinics. As of December 31, 2016, the Company operated 283 senior living communities located in 32 states with 31,830 living units, including 253 primarily independent and assisted living communities with 29,229 living units and 30 SNFs with 2,601 living units.
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