Community Health Systems (NYSE: CYH) and Select Medical Holdings Corporation (NYSE:SEM) are both 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.

Analyst Ratings

This is a breakdown of recent ratings for Community Health Systems and Select Medical Holdings Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Community Health Systems 3 10 0 0 1.77
Select Medical Holdings Corporation 1 1 4 0 2.50

Community Health Systems presently has a consensus price target of $5.79, suggesting a potential upside of 36.92%. Select Medical Holdings Corporation has a consensus price target of $19.60, suggesting a potential upside of 14.96%. Given Community Health Systems’ higher probable upside, equities analysts clearly believe Community Health Systems is more favorable than Select Medical Holdings Corporation.

Profitability

This table compares Community Health Systems and Select Medical Holdings Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Community Health Systems -3.97% -3.10% -0.22%
Select Medical Holdings Corporation 2.21% 11.44% 2.03%

Valuation & Earnings

This table compares Community Health Systems and Select Medical Holdings Corporation’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Community Health Systems $18.44 billion 0.03 -$1.72 billion ($5.98) -0.71
Select Medical Holdings Corporation $4.29 billion 0.53 $115.41 million $0.73 23.36

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

Risk and Volatility

Community Health Systems has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500. Comparatively, Select Medical Holdings Corporation has a beta of 1.4, meaning that its share price is 40% more volatile than the S&P 500.

Institutional & Insider Ownership

99.5% of Community Health Systems shares are owned by institutional investors. Comparatively, 78.3% of Select Medical Holdings Corporation shares are owned by institutional investors. 4.7% of Community Health Systems shares are owned by company insiders. Comparatively, 19.9% of Select Medical Holdings Corporation 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

Select Medical Holdings Corporation beats Community Health Systems on 9 of the 13 factors compared between the two stocks.

Community Health Systems Company Profile

Community Health Systems, Inc. is an operator of general acute care hospitals and outpatient facilities in communities across the country. The Company operates through hospital operations segment, which includes its general acute care hospitals and related healthcare entities that provide inpatient and outpatient healthcare services. The Company provides healthcare services through the hospitals that it owns and operates and affiliated businesses in non-urban and selected urban markets throughout the United States. The services provided through its hospitals and affiliated businesses include general acute care, emergency room, general and specialty surgery, critical care, internal medicine, obstetrics, diagnostic, psychiatric and rehabilitation services. The Company also provides additional outpatient services at urgent care centers, occupational medicine clinics, imaging centers, cancer centers, ambulatory surgery centers, and home health and hospice agencies.

Select Medical Holdings Corporation Company Profile

Select Medical Holdings Corporation is an operator of specialty hospitals, outpatient rehabilitation clinics and occupational medicine centers in the United States. The Company’s segments include specialty hospitals, outpatient rehabilitation, Concentra and Other. The specialty hospitals segment consists of hospitals designed to serve the needs of long term acute patients and hospitals designed to serve patients that require intensive medical rehabilitation care. The outpatient rehabilitation segment consists of clinics that provide physical, occupational, and speech rehabilitation services. The Concentra segment consists of medical centers and contract services provided at employer worksites and Department of Veterans Affairs community-based outpatient clinics (CBOCs) that deliver occupational medicine, physical therapy, veteran’s healthcare, and consumer health services. As of December 31, 2016, the Company had operations in 46 states and the District of Columbia.

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