Critical Review: HealthEquity (NASDAQ:HQY) & Addus HomeCare (NASDAQ:ADUS)

HealthEquity (NASDAQ:HQY) and Addus HomeCare (NASDAQ:ADUS) are both mid-cap healthcare companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, institutional ownership, profitability, analyst recommendations, earnings, dividends and risk.

Insider and Institutional Ownership

99.6% of HealthEquity shares are owned by institutional investors. Comparatively, 95.3% of Addus HomeCare shares are owned by institutional investors. 1.6% of HealthEquity shares are owned by company insiders. Comparatively, 4.1% of Addus HomeCare shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares HealthEquity and Addus HomeCare’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HealthEquity	17.36%	15.33%	9.51%
Addus HomeCare	7.13%	9.96%	7.62%

Earnings & Valuation

This table compares HealthEquity and Addus HomeCare”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HealthEquity	$1.36 billion	5.65	$215.20 million	$2.77	33.59
Addus HomeCare	$1.48 billion	1.45	$95.91 million	$5.70	20.05

HealthEquity has higher earnings, but lower revenue than Addus HomeCare. Addus HomeCare is trading at a lower price-to-earnings ratio than HealthEquity, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

HealthEquity has a beta of 0.24, indicating that its share price is 76% less volatile than the S&P 500. Comparatively, Addus HomeCare has a beta of 0.83, indicating that its share price is 17% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and price targets for HealthEquity and Addus HomeCare, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HealthEquity	1	1	10	1	2.85
Addus HomeCare	1	4	5	1	2.55

HealthEquity presently has a consensus target price of $112.20, indicating a potential upside of 20.58%. Addus HomeCare has a consensus target price of $129.33, indicating a potential upside of 13.19%. Given HealthEquity’s stronger consensus rating and higher probable upside, equities research analysts plainly believe HealthEquity is more favorable than Addus HomeCare.

Summary

HealthEquity beats Addus HomeCare on 10 of the 14 factors compared between the two stocks.

About HealthEquity

HealthEquity, Inc. provides technology-enabled services platforms to consumers and employers in the United States. The company offers cloud-based platforms for individuals to make health saving and spending decisions, pay healthcare bills, receive personalized benefit information, earn wellness incentives, grow their savings, and make investment choices; and health savings accounts. It also provides investment platform; and online-only automated investment advisory services through Advisor, a Web-based tool. In addition, the company offers flexible spending accounts; health reimbursement arrangements; and Consolidated Omnibus Budget Reconciliation Act continuation services, as well as administers pre-tax commuter benefit programs. It serves clients through a direct sales force; benefits brokers and advisors; and a network of health plans, benefits administrators, benefits brokers and consultants, and retirement plan record-keepers. HealthEquity, Inc. was incorporated in 2002 and is based in Draper, Utah.

About Addus HomeCare

Addus HomeCare Corporation, together with its subsidiaries, provides personal care services to elderly, chronically ill, disabled persons, and individuals who are at risk of hospitalization or institutionalization in the United States. The company operates through three segments: Personal Care, Hospice, and Home Health. The Personal Care segment provides non-medical assistance with activities of daily living. This segment offers services that include assistance with bathing, grooming, oral care, feeding and dressing, medication reminders, meal planning and preparation, housekeeping, and transportation services. The Hospice segment provides palliative nursing care, social work, spiritual counseling, homemaker, and bereavement counseling services for people who are terminally ill, as well as related services for their families. The Home Health segment offers skilled nursing and physical, occupational, and speech therapy for the individuals who requires assistance during an illness or after hospitalization. The company's payor clients include federal, state, and local governmental agencies; managed care organizations; commercial insurers; and private individuals. Addus HomeCare Corporation was founded in 1979 and is headquartered in Frisco, Texas.