Comparing HealthSouth (HLS) & HealthStream (HSTM)
HealthStream (NASDAQ: HSTM) and HealthSouth (NYSE:HLS) are both computer and technology companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, profitability, risk, analyst recommendations, dividends, earnings and institutional ownership.
Institutional and Insider Ownership
74.4% of HealthStream shares are held by institutional investors. Comparatively, 93.4% of HealthSouth shares are held by institutional investors. 21.1% of HealthStream shares are held by company insiders. Comparatively, 1.6% of HealthSouth shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.
This table compares HealthStream and HealthSouth’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|HealthStream||$225.97 million||3.37||$3.75 million||$0.18||132.51|
|HealthSouth||$3.71 billion||1.32||$247.60 million||$2.75||18.05|
HealthSouth has higher revenue and earnings than HealthStream. HealthSouth is trading at a lower price-to-earnings ratio than HealthStream, indicating that it is currently the more affordable of the two stocks.
This is a breakdown of recent ratings and recommmendations for HealthStream and HealthSouth, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
HealthStream presently has a consensus target price of $24.40, indicating a potential upside of 2.31%. HealthSouth has a consensus target price of $51.71, indicating a potential upside of 4.18%. Given HealthSouth’s stronger consensus rating and higher possible upside, analysts clearly believe HealthSouth is more favorable than HealthStream.
Volatility and Risk
HealthStream has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500. Comparatively, HealthSouth has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500.
This table compares HealthStream and HealthSouth’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
HealthSouth pays an annual dividend of $1.00 per share and has a dividend yield of 2.0%. HealthStream does not pay a dividend. HealthSouth pays out 36.4% of its earnings in the form of a dividend. HealthSouth has raised its dividend for 3 consecutive years.
HealthSouth beats HealthStream on 12 of the 17 factors compared between the two stocks.
HealthStream Company Profile
HealthStream, Inc. (HealthStream) provides workforce, patient experience and provider solutions for healthcare organizations. The Company operates in three segments: HealthStream Workforce Solutions, HealthStream Patient Experience Solutions and HealthStream Provider Solutions. HealthStream’s products and services are organized into three segments: Workforce Solutions, Patient Experience Solutions, and Provider Solutions. HealthStream’s solutions are provided to a range of customers within the healthcare industry across the continuum of care. Delivered primarily as Software-as-a-Service (SaaS), the Company’s solutions focus on challenges facing the healthcare workforce and healthcare organizations, including the need to manage, retain, engage and develop healthcare workforce talent; meet compliance requirements; manage ongoing medical staff credentialing and privileging processes, and deliver patient experiences of care in healthcare organizations.
HealthSouth Company Profile
HealthSouth Corporation (HealthSouth) is a provider of post-acute healthcare services, offering both facility-based and home-based post-acute services in 35 states and Puerto Rico through its network of inpatient rehabilitation hospitals, home health agencies and hospice agencies. The Company manages its operations through segments, including inpatient rehabilitation, and home health and hospice. It is an owner and operator of inpatient rehabilitation hospitals. It provides specialized rehabilitative treatment on both an inpatient and outpatient basis. It offers its home health and hospice services through Encompass Home Health and Hospice business (Encompass). Encompass operates home health and hospice agencies in 25 states, with concentrations in the Southeast, Oklahoma, and Texas. As of December 31, 2016, the Company operated 123 inpatient rehabilitation hospitals. As of December 31, 2016, the Company managed five inpatient rehabilitation units through management contracts.
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