Reviewing R1 RCM (RCM) & LHC Group (LHCG)
R1 RCM (NASDAQ: RCM) and LHC Group (NASDAQ:LHCG) are both small-cap finance companies, but which is the superior investment? We will contrast the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, valuation, dividends, earnings and risk.
Volatility & Risk
R1 RCM has a beta of -0.47, meaning that its share price is 147% less volatile than the S&P 500. Comparatively, LHC Group has a beta of 0.69, meaning that its share price is 31% less volatile than the S&P 500.
This table compares R1 RCM and LHC Group’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a summary of recent ratings and price targets for R1 RCM and LHC Group, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
R1 RCM currently has a consensus price target of $5.00, indicating a potential upside of 13.12%. LHC Group has a consensus price target of $76.89, indicating a potential upside of 24.30%. Given LHC Group’s stronger consensus rating and higher probable upside, analysts plainly believe LHC Group is more favorable than R1 RCM.
Insider & Institutional Ownership
47.7% of R1 RCM shares are owned by institutional investors. Comparatively, 85.5% of LHC Group shares are owned by institutional investors. 62.0% of R1 RCM shares are owned by insiders. Comparatively, 14.8% of LHC Group shares are owned by 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.
Valuation & Earnings
This table compares R1 RCM and LHC Group’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|R1 RCM||$592.56 million||0.78||$177.07 million||($0.26)||-17.00|
|LHC Group||$914.82 million||1.24||$36.58 million||$2.32||26.66|
R1 RCM has higher earnings, but lower revenue than LHC Group. R1 RCM is trading at a lower price-to-earnings ratio than LHC Group, indicating that it is currently the more affordable of the two stocks.
LHC Group beats R1 RCM on 11 of the 13 factors compared between the two stocks.
R1 RCM Company Profile
R1 RCM Inc., formerly Accretive Health, Inc., is a provider of revenue cycle management (RCM) and physician advisory services (PAS) to healthcare providers. The Company is engaged in providing management services of revenue cycle operations for the United States-based hospitals and other medical services providers. Its primary service offering consists of end-to-end RCM, which the Company deploys through a co-managed relationship or an operating partner relationship. The Company’s PAS offering assists hospitals in complying with payer requirements regarding whether to classify a hospital visit as an in-patient or an out-patient observation case for billing purposes. The Company also provides customers with retrospective appeal management service support for both governmental and commercial payers. Its physicians conduct detailed retrospective reviews of medical records to identify medical necessity for hospital services and the required documentation to support an appeal.
LHC Group Company Profile
LHC Group, Inc. is a holding company. The Company provides post-acute healthcare services to patients through its home nursing agencies, hospice agencies, community-based services agencies and long-term acute care hospitals (LTACHs). The Company operates through four segments: home health services, hospice services, community-based services and facility-based services. Through its home health services segment, the Company offers a range of services, including skilled nursing, medically oriented social services, and physical, occupational and speech therapy. Through its hospice services segment, the Company offers a range of services, including pain and symptom management, and emotional and spiritual support. Its community-based service operations offer a range of services to patients in their home or in a medical facility. The services range from assistance with grooming, medication reminders and meal preparation. It provides facility-based services principally through its LTACHs.
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