TeamHealth Holdings (NYSE: TMH) and Tenet Healthcare Corporation (NYSE:THC) are both healthcare companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Profitability

This table compares TeamHealth Holdings and Tenet Healthcare Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TeamHealth Holdings 0.92% 5.98% 0.99%
Tenet Healthcare Corporation -0.97% -2.00% -0.09%

Valuation and Earnings

This table compares TeamHealth Holdings and Tenet Healthcare Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
TeamHealth Holdings N/A N/A N/A $0.61 71.31
Tenet Healthcare Corporation $19.32 billion 0.09 $2.07 billion ($1.95) -9.29

Tenet Healthcare Corporation has higher revenue and earnings than TeamHealth Holdings. Tenet Healthcare Corporation is trading at a lower price-to-earnings ratio than TeamHealth Holdings, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

TeamHealth Holdings has a beta of 0.84, suggesting that its share price is 16% less volatile than the S&P 500. Comparatively, Tenet Healthcare Corporation has a beta of 1.27, suggesting that its share price is 27% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for TeamHealth Holdings and Tenet Healthcare Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TeamHealth Holdings 0 9 1 0 2.10
Tenet Healthcare Corporation 0 9 5 0 2.36

TeamHealth Holdings presently has a consensus target price of $42.29, indicating a potential downside of 2.79%. Tenet Healthcare Corporation has a consensus target price of $21.25, indicating a potential upside of 17.27%. Given Tenet Healthcare Corporation’s stronger consensus rating and higher probable upside, analysts plainly believe Tenet Healthcare Corporation is more favorable than TeamHealth Holdings.

Summary

Tenet Healthcare Corporation beats TeamHealth Holdings on 5 of the 9 factors compared between the two stocks.

TeamHealth Holdings Company Profile

Team Health Holdings, Inc. is a United States-based physician services company. The Company supplies outsourced healthcare professional staffing and administrative services to hospitals and other healthcare providers in the United States. It operates through four segments: Hospital Based Services, IPC Healthcare, Specialty Services and Other Services. The Hospital Based Services segment provides healthcare service programs to users of healthcare services on a fee for service, and on a cost plus or contract basis. The IPC Healthcare segment provides acute hospital medicine and post-acute provider service programs to users of healthcare services. The Specialty Services segment provides healthcare service programs to users of healthcare services in an outpatient setting or in a non-hospital-based environment. The Other Services segment is an aggregation of locums staffing, scribes, and billing, collection and consulting services that provides a range of other healthcare services.

Tenet Healthcare Corporation Company Profile

Tenet Healthcare Corporation (Tenet) is a healthcare services company. The Company operates regionally focused, integrated healthcare delivery networks in large urban and suburban markets in the United States. The Company’s segments include Hospital Operations and Other, Ambulatory Care and Conifer. As of December 31, 2016, its subsidiaries operated 79 hospitals, including three academic medical centers, two children’s hospitals, two specialty hospitals and one critical access hospital. The Company’s Ambulatory Care segment includes the operations of its USPI joint venture and its Aspen facilities. As of December 31, 2016, Conifer provided one or more of the business process services described above from 20 service centers to more than 800 Tenet and non-Tenet hospital and other clients in over 40 states. As of December 31, 2016, the Company operated 20 short-stay surgical hospitals, over 470 outpatient centers, and nine facilities in the United Kingdom.

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