Air Methods (NASDAQ: AIRM) and HealthStream (NASDAQ:HSTM) are both healthcare companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, institutional ownership, earnings, valuation, profitability, analyst recommendations and risk.

Insider & Institutional Ownership

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71.0% of HealthStream shares are owned by institutional investors. 9.0% of Air Methods shares are owned by company insiders. Comparatively, 21.1% of HealthStream shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Air Methods and HealthStream’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Air Methods 6.67% 14.18% 4.43%
HealthStream 4.04% 2.73% 1.99%

Valuation and Earnings

This table compares Air Methods and HealthStream’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Air Methods N/A N/A N/A $2.59 N/A
HealthStream $247.66 million 3.23 $10.00 million $0.31 80.55

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

Analyst Recommendations

This is a summary of current ratings and target prices for Air Methods and HealthStream, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Air Methods 0 3 1 0 2.25
HealthStream 0 4 4 0 2.50

Air Methods presently has a consensus price target of $43.00, suggesting a potential upside of Infinity. HealthStream has a consensus price target of $25.67, suggesting a potential upside of 2.79%. Given Air Methods’ higher possible upside, equities research analysts clearly believe Air Methods is more favorable than HealthStream.

Summary

HealthStream beats Air Methods on 6 of the 11 factors compared between the two stocks.

Air Methods Company Profile

Air Methods Corporation is engaged in providing air medical emergency transport services and systems throughout the United States. The Company’s segments include Air Medical Services (AMS), Tourism and United Rotorcraft (UR) Division. As of December 31, 2016, its AMS Division provided air medical transportation services in 41 states to the general population as an independent service (also called community-based services) and to hospitals or other institutions under exclusive operating agreements (also called hospital-based services). It transports persons requiring intensive medical care from either the scene of an accident or general care hospitals to skilled trauma centers or tertiary care centers. As of December 31, 2016, its Air Medical Services Division operated 394 helicopters and 31 fixed wing aircrafts under both Instrument Flight Rules (IFR) and Visual Flight Rules (VFR). As of December 31, 2016, its Tourism Division operated 63 helicopters and two fixed wing aircrafts.

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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