Critical Survey: Tenet Healthcare (NYSE:THC) versus BrightSpring Health Services (NASDAQ:BTSG)

BrightSpring Health Services (NASDAQ:BTSG) and Tenet Healthcare (NYSE:THC) are both large-cap healthcare companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, dividends and profitability.

Analyst Ratings

This is a summary of recent recommendations for BrightSpring Health Services and Tenet Healthcare, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
BrightSpring Health Services	0	0	17	2	3.11
Tenet Healthcare	0	3	19	0	2.86

BrightSpring Health Services currently has a consensus price target of $77.81, indicating a potential upside of 9.27%. Tenet Healthcare has a consensus price target of $296.65, indicating a potential upside of 3.60%. Given BrightSpring Health Services’ stronger consensus rating and higher probable upside, equities analysts plainly believe BrightSpring Health Services is more favorable than Tenet Healthcare.

Insider and Institutional Ownership

95.4% of Tenet Healthcare shares are held by institutional investors. 2.8% of BrightSpring Health Services shares are held by insiders. Comparatively, 1.0% of Tenet Healthcare shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Earnings & Valuation

This table compares BrightSpring Health Services and Tenet Healthcare”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
BrightSpring Health Services	$12.91 billion	1.10	$190.67 million	$1.85	38.49
Tenet Healthcare	$21.31 billion	1.07	$1.41 billion	$34.48	8.30

Tenet Healthcare has higher revenue and earnings than BrightSpring Health Services. Tenet Healthcare is trading at a lower price-to-earnings ratio than BrightSpring Health Services, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

BrightSpring Health Services has a beta of 1.77, suggesting that its stock price is 77% more volatile than the S&P 500. Comparatively, Tenet Healthcare has a beta of 1.2, suggesting that its stock price is 20% more volatile than the S&P 500.

Profitability

This table compares BrightSpring Health Services and Tenet Healthcare’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
BrightSpring Health Services	2.69%	18.56%	6.03%
Tenet Healthcare	13.09%	28.22%	6.12%

Summary

Tenet Healthcare beats BrightSpring Health Services on 8 of the 15 factors compared between the two stocks.

About BrightSpring Health Services

BrightSpring Health Services is a provider of home- and community-based health services in the United States. The company supports people with complex health needs, including individuals with intellectual and developmental disabilities, behavioral health conditions, and chronic or age-related illnesses. Its services include home health and hospice care, behavioral health and rehabilitation, residential and community-based support, and pharmacy services. BrightSpring’s pharmacy operations provide prescription dispensing and related services to people receiving care in homes, community settings, and long-term care facilities.

About Tenet Healthcare

Tenet Healthcare Corporation is a U.S.-based healthcare services company that operates acute care hospitals and provides related inpatient and outpatient services. Its hospitals offer services across areas such as emergency care, surgery, imaging and specialty treatment. Through its subsidiary United Surgical Partners International (USPI), Tenet also operates ambulatory surgery centers and surgical hospitals, providing outpatient surgical and procedural care. The company’s Conifer Health Solutions business provides revenue cycle management and other administrative services to healthcare providers.