Head to Head Contrast: The Pennant Group (NASDAQ:PNTG) vs. Quest Diagnostics (NYSE:DGX)

The Pennant Group (NASDAQ:PNTG) and Quest Diagnostics (NYSE:DGX) are both medical companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.

Institutional & Insider Ownership

85.9% of The Pennant Group shares are held by institutional investors. Comparatively, 88.1% of Quest Diagnostics shares are held by institutional investors. 5.4% of The Pennant Group shares are held by insiders. Comparatively, 8.2% of Quest Diagnostics shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Valuation and Earnings

This table compares The Pennant Group and Quest Diagnostics”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The Pennant Group	$695.24 million	1.52	$22.56 million	$0.75	40.71
Quest Diagnostics	$9.87 billion	2.04	$871.00 million	$8.52	21.25

Quest Diagnostics has higher revenue and earnings than The Pennant Group. Quest Diagnostics is trading at a lower price-to-earnings ratio than The Pennant Group, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and target prices for The Pennant Group and Quest Diagnostics, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The Pennant Group	0	2	6	0	2.75
Quest Diagnostics	0	9	7	0	2.44

The Pennant Group currently has a consensus price target of $36.20, indicating a potential upside of 18.57%. Quest Diagnostics has a consensus price target of $197.27, indicating a potential upside of 8.95%. Given The Pennant Group’s stronger consensus rating and higher possible upside, equities analysts clearly believe The Pennant Group is more favorable than Quest Diagnostics.

Volatility and Risk

The Pennant Group has a beta of 1.28, suggesting that its share price is 28% more volatile than the S&P 500. Comparatively, Quest Diagnostics has a beta of 0.64, suggesting that its share price is 36% less volatile than the S&P 500.

Profitability

This table compares The Pennant Group and Quest Diagnostics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
The Pennant Group	3.15%	9.37%	4.20%
Quest Diagnostics	8.91%	15.47%	6.84%

Summary

Quest Diagnostics beats The Pennant Group on 10 of the 14 factors compared between the two stocks.

About The Pennant Group

The Pennant Group, Inc. provides healthcare services in the United States. It operates in two segments, Home Health and Hospice Services, and Senior Living Services. The company offers home health services, including clinical services, such as nursing, speech, occupational and physical therapy, medical social work, and home health aide services; and hospice services comprising clinical care, education, and counseling services for the physical, spiritual, and psychosocial needs of terminally ill patients and their families. It also provides senior living services, such as residential accommodations, activities, meals, housekeeping, and assistance in the activities of daily living to seniors who are independent or who require some support. The company operates home health, hospice, and home care agencies, as well as senior living communities throughout Arizona, California, Colorado, Idaho, Montana, Nevada, Oklahoma, Oregon, Texas, Utah, Washington, Wisconsin, and Wyoming. The Pennant Group, Inc. was incorporated in 2019 and is headquartered in Eagle, Idaho.

About Quest Diagnostics

Quest Diagnostics Incorporated provides diagnostic testing and services in the United States and internationally. The company develops and delivers diagnostic information services, such as routine, non-routine and advanced clinical testing, anatomic pathology testing, and other diagnostic information services. It offers diagnostic information services primarily under the Quest Diagnostics brand, as well as under the AmeriPath, Dermpath Diagnostics, ExamOne, and Quanum brands to physicians, hospitals, patients and consumers, health plans, government agencies, employers, retailers, pharmaceutical companies and insurers, and accountable care organizations through a network of laboratories, patient service centers, phlebotomists in physician offices, call centers and mobile phlebotomists, nurses, and other health and wellness professionals. The company also provides risk assessment services for the life insurance industry; and healthcare organizations and clinicians information technology solutions. Quest Diagnostics Incorporated was founded in 1967 and is headquartered in Secaucus, New Jersey.