Universal Health Services (NYSE:UHS) and Tenet Healthcare (NYSE:THC) are both medical companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, risk, analyst recommendations, earnings and institutional ownership.
Analyst Recommendations
This is a summary of recent recommendations and price targets for Universal Health Services and Tenet Healthcare, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Universal Health Services | 2 | 2 | 7 | 0 | 2.45 |
| Tenet Healthcare | 1 | 4 | 8 | 0 | 2.54 |
Universal Health Services currently has a consensus target price of $142.50, indicating a potential downside of 1.41%. Tenet Healthcare has a consensus target price of $44.2941, indicating a potential downside of 16.83%. Given Universal Health Services' higher probable upside, analysts plainly believe Universal Health Services is more favorable than Tenet Healthcare.
Valuation & Earnings
This table compares Universal Health Services and Tenet Healthcare's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Universal Health Services | $11.38 billion | 1.08 | $814.85 million | $9.99 | 14.43 |
| Tenet Healthcare | $18.48 billion | 0.30 | $-232,000,000.00 | $2.68 | 19.75 |
Universal Health Services has higher earnings, but lower revenue than Tenet Healthcare. Universal Health Services is trading at a lower price-to-earnings ratio than Tenet Healthcare, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Universal Health Services and Tenet Healthcare's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Universal Health Services | 7.74% | 15.61% | 7.37% |
| Tenet Healthcare | -0.07% | 82.39% | 1.77% |
Risk and Volatility
Universal Health Services has a beta of 1.19, indicating that its share price is 19% more volatile than the S&P 500. Comparatively, Tenet Healthcare has a beta of 2.66, indicating that its share price is 166% more volatile than the S&P 500.
Insider and Institutional Ownership
82.3% of Universal Health Services shares are held by institutional investors. Comparatively, 93.1% of Tenet Healthcare shares are held by institutional investors. 12.6% of Universal Health Services shares are held by insiders. Comparatively, 1.7% of Tenet Healthcare shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Summary
Universal Health Services beats Tenet Healthcare on 8 of the 14 factors compared between the two stocks.
