The Ensign Group (NASDAQ:ENSG) and Universal Health Services (NYSE:UHS) are both medical companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, profitability, institutional ownership, valuation and earnings.
Dividends
The Ensign Group pays an annual dividend of $0.21 per share and has a dividend yield of 0.3%. Universal Health Services pays an annual dividend of $0.80 per share and has a dividend yield of 0.5%. The Ensign Group pays out 10.0% of its earnings in the form of a dividend. Universal Health Services pays out 8.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. The Ensign Group has raised its dividend for 1 consecutive years and Universal Health Services has raised its dividend for 1 consecutive years. Universal Health Services is clearly the better dividend stock, given its higher yield and lower payout ratio.
Valuation & Earnings
This table compares The Ensign Group and Universal Health Services' top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| The Ensign Group | $2.04 billion | 2.27 | $110.53 million | $2.09 | 40.18 |
| Universal Health Services | $11.38 billion | 1.17 | $814.85 million | $9.99 | 15.72 |
Universal Health Services has higher revenue and earnings than The Ensign Group. Universal Health Services is trading at a lower price-to-earnings ratio than The Ensign Group, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
The Ensign Group has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500. Comparatively, Universal Health Services has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500.
Analyst Ratings
This is a breakdown of current ratings and target prices for The Ensign Group and Universal Health Services, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| The Ensign Group | 0 | 2 | 3 | 0 | 2.60 |
| Universal Health Services | 2 | 2 | 5 | 0 | 2.33 |
The Ensign Group presently has a consensus target price of $81.00, indicating a potential downside of 3.54%. Universal Health Services has a consensus target price of $146.90, indicating a potential downside of 6.46%. Given The Ensign Group's stronger consensus rating and higher possible upside, equities research analysts clearly believe The Ensign Group is more favorable than Universal Health Services.
Insider & Institutional Ownership
78.6% of The Ensign Group shares are held by institutional investors. Comparatively, 82.3% of Universal Health Services shares are held by institutional investors. 6.8% of The Ensign Group shares are held by company insiders. Comparatively, 12.6% of Universal Health Services shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Profitability
This table compares The Ensign Group and Universal Health Services' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| The Ensign Group | 6.49% | 21.65% | 6.28% |
| Universal Health Services | 7.74% | 15.61% | 7.37% |
Summary
Universal Health Services beats The Ensign Group on 11 of the 16 factors compared between the two stocks.
