Healthways (NASDAQ: TVTY) and BioScrip (NASDAQ:BIOS) are both small-cap medical companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, earnings, valuation, institutional ownership, risk, analyst recommendations and profitability.

Profitability

This table compares Healthways and BioScrip’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Healthways 17.30% 29.81% 10.02%
BioScrip -8.03% N/A -7.39%

Analyst Ratings

This is a breakdown of recent ratings for Healthways and BioScrip, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Healthways 0 1 5 0 2.83
BioScrip 0 0 4 0 3.00

Healthways presently has a consensus price target of $39.67, suggesting a potential upside of 2.37%. BioScrip has a consensus price target of $3.94, suggesting a potential upside of 40.63%. Given BioScrip’s stronger consensus rating and higher probable upside, analysts clearly believe BioScrip is more favorable than Healthways.

Risk and Volatility

Healthways has a beta of 0.41, meaning that its share price is 59% less volatile than the S&P 500. Comparatively, BioScrip has a beta of 0.28, meaning that its share price is 72% less volatile than the S&P 500.

Earnings & Valuation

This table compares Healthways and BioScrip’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Healthways $529.87 million 2.88 $115.05 million $2.32 16.70
BioScrip $900.58 million 0.40 $25.07 million ($0.68) -4.12

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

Institutional & Insider Ownership

84.2% of BioScrip shares are owned by institutional investors. 8.4% of Healthways shares are owned by company insiders. Comparatively, 0.8% of BioScrip shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Healthways beats BioScrip on 9 of the 13 factors compared between the two stocks.

About Healthways

Tivity Health, Inc., formerly Healthways, Inc., is focused targeted population health for those aged 50 and older. The Company offers three programs: SilverSneakers senior fitness, Prime fitness and WholeHealth Living. The SilverSneakers senior fitness program is offered to members of Medicare Advantage, Medicare Supplement, and Group Retiree plans. The Company also offers Prime fitness, a fitness facility access program, through commercial health plans, employers and insurance exchanges. Its national network of fitness centers delivers both SilverSneakers and Prime fitness. As of December 31, 2016, the Company’s fitness networks encompassed approximately 16,000 participating locations and more than 1,000 alternative locations that provide classes outside of traditional fitness centers. As of December 31, 2016, the Company’s WholeHealth Living network included over 88,000 complementary, alternative, and physical medicine practitioners to serve individuals through health plans.

About BioScrip

BioScrip, Inc. is engaged in providing infusion solutions. The Company partners with physicians, hospital systems, skilled nursing facilities, healthcare payors and pharmaceutical manufacturers to provide patients access to post-acute care services. The Company operates through Infusion Services segment. The Company operates through approximately 70 service locations in over 30 states. The Company offers home infusion services to provide clinical management services and the delivery of prescription medications. The Company provides services in coordination with, and under the direction of, the patient’s physician. The Company’s multidisciplinary team of clinicians, including pharmacists, nurses, dietitians and respiratory therapists, work with the physician to develop a plan of care suited to the patient’s specific needs. Its platform provides service capabilities to deliver clinical management services that offer patients a community-based and home-based care environment.

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