LifePoint Health (NASDAQ: LPNT) and Select Medical (NYSE:SEM) are both healthcare companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, valuation, dividends, risk and earnings.

Risk & Volatility

LifePoint Health has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500. Comparatively, Select Medical has a beta of 1.35, indicating that its stock price is 35% more volatile than the S&P 500.

Valuation & Earnings

This table compares LifePoint Health and Select Medical’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LifePoint Health $7.27 billion 0.27 $121.90 million $4.22 11.67
Select Medical $4.29 billion 0.52 $115.41 million $0.73 22.81

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

Analyst Recommendations

This is a summary of recent ratings and price targets for LifePoint Health and Select Medical, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LifePoint Health 0 11 5 0 2.31
Select Medical 1 1 4 0 2.50

LifePoint Health currently has a consensus price target of $59.17, indicating a potential upside of 20.14%. Select Medical has a consensus price target of $19.60, indicating a potential upside of 17.72%. Given LifePoint Health’s higher probable upside, research analysts clearly believe LifePoint Health is more favorable than Select Medical.

Profitability

This table compares LifePoint Health and Select Medical’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LifePoint Health 2.45% 7.01% 2.53%
Select Medical 2.21% 11.44% 2.03%

Insider & Institutional Ownership

99.2% of LifePoint Health shares are owned by institutional investors. Comparatively, 77.9% of Select Medical shares are owned by institutional investors. 8.8% of LifePoint Health shares are owned by company insiders. Comparatively, 19.9% of Select Medical shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

LifePoint Health beats Select Medical on 8 of the 14 factors compared between the two stocks.

LifePoint Health Company Profile

LifePoint Health, Inc., through its subsidiaries, owns and operates community hospitals, regional health systems, physician practices, outpatient centers and post-acute facilities. As of December 31, 2016, the Company operated 72 hospital campuses in 22 states, having a total of 9,424 licensed beds. It offers a range of general and specialized healthcare services to patients through a network of hospitals and outpatient facilities. Its services include general surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic care, coronary care, rehabilitation services and pediatric services, and in some of its hospitals, the Company offers specialized services, such as open-heart surgery, skilled nursing, psychiatric care and neuro-surgery. It provides outpatient services, such as same-day surgery, laboratory, x-ray, respiratory therapy, imaging, sports medicine and lithotripsy.

Select Medical 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.

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