AMERIGROUP (NYSE: AGP) and Quorum Health (NYSE:QHC) are both hospitals, clinics & primary care services companies, but which is the superior stock? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, earnings, profitability, risk and dividends.

Analyst Recommendations

This is a summary of recent ratings and target prices for AMERIGROUP and Quorum Health, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AMERIGROUP 0 0 0 0 N/A
Quorum Health 0 4 0 0 2.00

Quorum Health has a consensus price target of $3.88, indicating a potential downside of 44.96%. Given Quorum Health’s higher possible upside, analysts plainly believe Quorum Health is more favorable than AMERIGROUP.

Earnings & Valuation

This table compares AMERIGROUP and Quorum Health’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AMERIGROUP N/A N/A N/A $2.56 2.07
Quorum Health $2.42 billion 0.09 -$347.68 million ($6.30) -1.12

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

Insider & Institutional Ownership

81.8% of Quorum Health shares are held by institutional investors. 4.7% of Quorum Health shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares AMERIGROUP and Quorum Health’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AMERIGROUP N/A N/A N/A
Quorum Health -8.28% -38.34% -3.34%

Volatility & Risk

AMERIGROUP has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500. Comparatively, Quorum Health has a beta of 7.19, meaning that its stock price is 619% more volatile than the S&P 500.

Summary

Quorum Health beats AMERIGROUP on 5 of the 9 factors compared between the two stocks.

About AMERIGROUP

AMERIGROUP Corporation is a multi-state managed healthcare company focused on serving people who receive healthcare benefits through publicly funded healthcare programs, including Medicaid, Children’s Health Insurance Program (CHIP), Medicaid expansion programs and Medicare Advantage. The Company offers a continuum of care management, including disease management, pharmacy integration, centralized telephonic case management, in-person case management within healthcare facilities, and home visit case management for some of its members. As of December 31, 2011, the Company provided a number of healthcare products to approximately 2,024,000 members. Effective February 1, 2012, it provides managed care services in Louisiana. On May 1, 2012, it acquired Health Plus. In November 2012, the Company sold its Virginia health plan to Inova Health System Foundation. In December 2012, WellPoint Inc acquired the Company.

About Quorum Health

Quorum Health Corporation is an operator and manager of general acute care hospitals and outpatient services in the United States. The Company operates in two segments: Hospital operations, which includes its general acute care hospitals and related healthcare entities that provide inpatient and outpatient healthcare services, and hospital management advisory and consulting services, which includes Quorum Health Resources, LLC (QHR). It operates QHR, which is a hospital management advisory and consulting services that provides services to non-affiliated general acute care hospitals. Its hospitals and its affiliated businesses offer services, such as general acute care, emergency room, general and specialty surgery and rehabilitation services.

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