LifePoint Health (NASDAQ: LPNT) and Chemed (NYSE:CHE) are both mid-cap medical companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, risk, dividends, analyst recommendations, earnings and valuation.

Insider & Institutional Ownership

99.5% of LifePoint Health shares are owned by institutional investors. Comparatively, 97.0% of Chemed shares are owned by institutional investors. 7.3% of LifePoint Health shares are owned by insiders. Comparatively, 5.3% of Chemed shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares LifePoint Health and Chemed’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
LifePoint Health $6.42 billion 0.35 $760.40 million $4.48 12.63
Chemed $1.62 billion 1.93 $226.52 million $3.99 49.09

LifePoint Health has higher revenue and earnings than Chemed. LifePoint Health is trading at a lower price-to-earnings ratio than Chemed, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and target prices for LifePoint Health and Chemed, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LifePoint Health 2 8 3 0 2.08
Chemed 0 1 1 0 2.50

LifePoint Health currently has a consensus target price of $65.50, indicating a potential upside of 15.72%. Chemed has a consensus target price of $214.50, indicating a potential upside of 9.51%. Given LifePoint Health’s higher possible upside, equities analysts plainly believe LifePoint Health is more favorable than Chemed.

Volatility and Risk

LifePoint Health has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500. Comparatively, Chemed has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500.

Dividends

Chemed pays an annual dividend of $1.12 per share and has a dividend yield of 0.6%. LifePoint Health does not pay a dividend. Chemed pays out 28.1% of its earnings in the form of a dividend. Chemed has raised its dividend for 8 consecutive years.

Profitability

This table compares LifePoint Health and Chemed’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LifePoint Health 2.61% 7.40% 2.66%
Chemed -5.22% -18.22% -9.67%

Summary

LifePoint Health beats Chemed on 11 of the 17 factors compared between the two stocks.

LifePoint Health Company Profile

LifePoint Health, Inc., through its subsidiaries, owns and operates community hospitals, regional health systems, physician practices, outpatient centers and post-acute facilities. As of December 31, 2016, the Company operated 72 hospital campuses in 22 states, having a total of 9,424 licensed beds. It offers a range of general and specialized healthcare services to patients through a network of hospitals and outpatient facilities. Its services include general surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic care, coronary care, rehabilitation services and pediatric services, and in some of its hospitals, the Company offers specialized services, such as open-heart surgery, skilled nursing, psychiatric care and neuro-surgery. It provides outpatient services, such as same-day surgery, laboratory, x-ray, respiratory therapy, imaging, sports medicine and lithotripsy.

Chemed Company Profile

Chemed Corporation purchases, operates and divests subsidiaries engaged in various business activities. The Company operates through two segments: the VITAS segment (VITAS) and the Roto-Rooter segment (Roto-Rooter). The Company’s VITAS provides hospice and palliative care services to its patients through a network of physicians, registered nurses, home health aides, social workers, clergy and volunteers. VITAS is the provider of hospice services in an industry dominated primarily by small, non-profit, community-based hospices. VITAS provides hospice care to Medicare beneficiaries participating in these managed care programs. A portion of its VITAS business is operated in the state of Florida. The Roto-Rooter segment provides plumbing, drain cleaning, water restoration and other related services to both residential and commercial customers.

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