Critical Analysis: Sonic Healthcare (OTCMKTS:SKHHY) and Surgery Partners (NASDAQ:SGRY)

Sonic Healthcare (OTCMKTS:SKHHY) and Surgery Partners (NASDAQ:SGRY) are both medical companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, risk, earnings, dividends, institutional ownership, profitability and valuation.

Valuation & Earnings

This table compares Sonic Healthcare and Surgery Partners”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sonic Healthcare	$6.25 billion	1.06	$332.61 million	N/A	N/A
Surgery Partners	$3.31 billion	0.53	-$77.90 million	($0.60)	-22.48

Sonic Healthcare has higher revenue and earnings than Surgery Partners.

Profitability

This table compares Sonic Healthcare and Surgery Partners’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sonic Healthcare	N/A	N/A	N/A
Surgery Partners	-2.28%	1.04%	0.41%

Volatility & Risk

Sonic Healthcare has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500. Comparatively, Surgery Partners has a beta of 1.99, indicating that its share price is 99% more volatile than the S&P 500.

Institutional and Insider Ownership

0.0% of Sonic Healthcare shares are owned by institutional investors. 2.7% of Surgery Partners 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.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Sonic Healthcare and Surgery Partners, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sonic Healthcare	1	1	0	0	1.50
Surgery Partners	1	3	8	0	2.58

Surgery Partners has a consensus price target of $22.18, suggesting a potential upside of 64.43%. Given Surgery Partners’ stronger consensus rating and higher possible upside, analysts plainly believe Surgery Partners is more favorable than Sonic Healthcare.

Summary

Surgery Partners beats Sonic Healthcare on 7 of the 12 factors compared between the two stocks.

About Sonic Healthcare

Sonic Healthcare Limited offers medical diagnostic services to medical practitioners, hospitals, community health services, and their collective patients. The company provides laboratory medicine/pathology testing services, such as biochemistry, cytopathology, genetics, haematology, histopathology, immunoserology, microbiology, molecular pathology, prenatal testing, toxicology, and ancillary functions; and radiology services, including magnetic resonance imaging, computed tomography (CT), ultrasound, X-ray, mammography, nuclear medicine, PET CT, interventional procedures, and bone mineral densitometry. It offers primary care medical services comprising general practice clinics, occupational health services, skin cancer clinics, after-hours general practice services, general practice IT solutions, and community-based healthcare services. The company operates in Australia, the United Kingdom, Ireland, the United States, Germany, Switzerland, New Zealand, Belgium, and internationally. Sonic Healthcare Limited was incorporated in 1934 and is headquartered in Sydney, Australia.

About Surgery Partners

Surgery Partners, Inc., together with its subsidiaries, owns and operates a network of surgical facilities and ancillary services in the United States. The company provides ambulatory surgery centers and surgical hospitals that offer non-emergency surgical procedures in various specialties, including orthopedics and pain management, ophthalmology, gastroenterology, and general surgery. It offers diagnostic imaging, laboratory, obstetrics, oncology, pharmacy, physical therapy, and wound care; and ancillary services, including multi-specialty physician practices, urgent care facilities, and anesthesia services. In addition, it offers single- and multi-specialty facilities. Surgery Partners, Inc. was founded in 2004 and is headquartered in Brentwood, Tennessee.