American Renal Associates (NYSE: ARA) and TeamHealth (NYSE:TMH) are both medical companies, but which is the better investment? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, profitability, risk, analyst recommendations and dividends.

Valuation & Earnings

This table compares American Renal Associates and TeamHealth’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
American Renal Associates $749.77 million 0.79 -$380,000.00 ($0.33) -56.94
TeamHealth N/A N/A N/A $0.26 N/A

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

Profitability

This table compares American Renal Associates and TeamHealth’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
American Renal Associates -2.15% 15.80% 2.34%
TeamHealth 0.92% 5.98% 0.99%

Analyst Ratings

This is a breakdown of recent recommendations for American Renal Associates and TeamHealth, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
American Renal Associates 0 0 4 0 3.00
TeamHealth 0 0 0 0 N/A

American Renal Associates currently has a consensus price target of $20.00, indicating a potential upside of 6.44%.

Insider & Institutional Ownership

93.7% of American Renal Associates shares are held by institutional investors. 12.6% of American Renal Associates shares are held by company insiders. Comparatively, 1.3% of TeamHealth shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

American Renal Associates beats TeamHealth on 6 of the 9 factors compared between the two stocks.

American Renal Associates Company Profile

American Renal Associates Holdings, Inc. is a dialysis service provider in the United States focused on joint venture (JV) partnerships with physicians. As of December 31, 2016, the Company owned and operated 214 dialysis clinics in partnership with 379 nephrologist partners treating over 14,000 patients in 25 states and the District of Columbia. The Company operates its dialysis clinics exclusively through a JV model, in which it partners primarily with local nephrologists to develop, own and operate dialysis clinics, while the providers of the majority of dialysis services in the United States operate through a combination of subsidiaries and joint ventures. It provides patient care and clinical outcomes to patients suffering from end-stage renal disease (ESRD). Its clinics offer both in center and home dialysis options to meet the needs of patients. Its clinics primarily provide in center hemodialysis treatments and ancillary items and services.

TeamHealth Company Profile

Team Health Holdings, Inc. is a United States-based physician services company. The Company supplies outsourced healthcare professional staffing and administrative services to hospitals and other healthcare providers in the United States. It operates through four segments: Hospital Based Services, IPC Healthcare, Specialty Services and Other Services. The Hospital Based Services segment provides healthcare service programs to users of healthcare services on a fee for service, and on a cost plus or contract basis. The IPC Healthcare segment provides acute hospital medicine and post-acute provider service programs to users of healthcare services. The Specialty Services segment provides healthcare service programs to users of healthcare services in an outpatient setting or in a non-hospital-based environment. The Other Services segment is an aggregation of locums staffing, scribes, and billing, collection and consulting services that provides a range of other healthcare services.

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