Premier (NASDAQ: PINC) and Quorum Health Corporation (NYSE:QHC) are both small-cap medical companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, risk, valuation, profitability and institutional ownership.

Profitability

This table compares Premier and Quorum Health Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Premier 0.66% -16.27% 10.59%
Quorum Health Corporation -6.88% -26.69% -2.79%

Insider & Institutional Ownership

81.4% of Quorum Health Corporation shares are held by institutional investors. 17.1% of Premier shares are held by insiders. Comparatively, 4.7% of Quorum Health Corporation shares are held by 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.

Volatility and Risk

Premier has a beta of 0.46, indicating that its share price is 54% less volatile than the S&P 500. Comparatively, Quorum Health Corporation has a beta of 9.5, indicating that its share price is 850% more volatile than the S&P 500.

Earnings and Valuation

This table compares Premier and Quorum Health Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Premier $1.45 billion 1.21 $440.72 million ($6.33) -5.20
Quorum Health Corporation $2.12 billion 0.06 $90.00 million ($5.51) -0.78

Premier has higher revenue, but lower earnings than Quorum Health Corporation. Premier is trading at a lower price-to-earnings ratio than Quorum Health Corporation, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and recommmendations for Premier and Quorum Health Corporation, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Premier 1 1 8 0 2.70
Quorum Health Corporation 1 3 0 0 1.75

Premier presently has a consensus price target of $39.33, indicating a potential upside of 19.55%. Quorum Health Corporation has a consensus price target of $4.13, indicating a potential downside of 4.07%. Given Premier’s stronger consensus rating and higher possible upside, research analysts plainly believe Premier is more favorable than Quorum Health Corporation.

Summary

Premier beats Quorum Health Corporation on 9 of the 13 factors compared between the two stocks.

About Premier

Premier, Inc. is a healthcare improvement company. The Company is uniting an alliance of approximately 3,750 United States hospitals and more than 130,000 other provider organizations to transform healthcare. The Company operates healthcare group purchasing organizations and also provides integrated data and analytics, supply chain solutions, advisory services, performance improvement collaborative and other services. The Company plays a role in the healthcare industry, collaborating with members to co-develop long-term innovations that reinvent and improve the way care is delivered to patients nationwide.

About Quorum Health Corporation

Quorum Health Corporation is an operator and manager of general acute care hospitals and outpatient services in the United States. The Company operates in two segments: Hospital operations, which includes its general acute care hospitals and related healthcare entities that provide inpatient and outpatient healthcare services, and hospital management advisory and consulting services, which includes Quorum Health Resources, LLC (QHR). It operates QHR, which is a hospital management advisory and consulting services that provides services to non-affiliated general acute care hospitals. Its hospitals and its affiliated businesses offer services, such as general acute care, emergency room, general and specialty surgery and rehabilitation services. On April 1, 2016, Community Health Systems, Inc. announced that its board of directors has approved the distribution to its stockholders of 100% of the common stock of a new, independent publicly traded company, Quorum Health Corporation.

Receive News & Stock Ratings for Premier Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Premier Inc. and related stocks with our FREE daily email newsletter.