Premier (NASDAQ: PINC) and U.S. Physical Therapy (NYSE:USPH) are both small-cap medical companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, analyst recommendations, risk, earnings and dividends.

Valuation and Earnings

This table compares Premier and U.S. Physical Therapy’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Premier $1.45 billion 1.18 $440.72 million ($6.33) -5.10
U.S. Physical Therapy $377.24 million 1.98 $60.41 million $1.71 34.77

Premier has higher revenue and earnings than U.S. Physical Therapy. Premier is trading at a lower price-to-earnings ratio than U.S. Physical Therapy, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Premier has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500. Comparatively, U.S. Physical Therapy has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500.

Dividends

U.S. Physical Therapy pays an annual dividend of $0.80 per share and has a dividend yield of 1.3%. Premier does not pay a dividend. U.S. Physical Therapy pays out 46.8% of its earnings in the form of a dividend. Premier has increased its dividend for 6 consecutive years.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Premier and U.S. Physical Therapy, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Premier 1 1 7 0 2.67
U.S. Physical Therapy 0 2 3 0 2.60

Premier currently has a consensus price target of $39.60, indicating a potential upside of 22.71%. U.S. Physical Therapy has a consensus price target of $69.75, indicating a potential upside of 17.33%. Given Premier’s stronger consensus rating and higher probable upside, research analysts clearly believe Premier is more favorable than U.S. Physical Therapy.

Profitability

This table compares Premier and U.S. Physical Therapy’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%
U.S. Physical Therapy 5.65% 12.91% 7.01%

Insider and Institutional Ownership

37.8% of Premier shares are held by institutional investors. Comparatively, 95.0% of U.S. Physical Therapy shares are held by institutional investors. 17.1% of Premier shares are held by insiders. Comparatively, 3.1% of U.S. Physical Therapy shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Summary

Premier beats U.S. Physical Therapy on 9 of the 17 factors compared between the two stocks.

Premier Company Profile

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.

U.S. Physical Therapy Company Profile

U.S. Physical Therapy, Inc., through its subsidiaries, operates outpatient physical therapy clinics that provide pre-and post-operative care, and treatment for orthopedic-related disorders, sports-related injuries, preventative care, rehabilitation of injured workers and neurological-related injuries. The Company’s segment is made up of various clinics within partnerships. The Company primarily operates through subsidiary clinic partnerships, in which it owns a general partnership interest and a limited partnership interest, and the managing therapists of the clinics owns the remaining limited partnership interest in the clinics. The Company operates 562 physical therapy clinics in 42 states. There are approximately 380 clinics operated under Clinic Partnerships and over 100 operated as Company-owned Facilities. In addition to its owned clinics, it also manages physical therapy facilities for third parties, primarily physicians, with over 29 third-party facilities under management.

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