Fresenius Medical Care AG & Co. (NYSE: FMS) and HealthStream (NASDAQ:HSTM) are both medical companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, risk, institutional ownership and dividends.

Analyst Ratings

This is a summary of recent ratings and price targets for Fresenius Medical Care AG & Co. and HealthStream, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fresenius Medical Care AG & Co. 0 3 4 0 2.57
HealthStream 0 4 2 0 2.33

Fresenius Medical Care AG & Co. currently has a consensus target price of $53.00, indicating a potential downside of 2.39%. HealthStream has a consensus target price of $24.40, indicating a potential upside of 3.30%. Given HealthStream’s higher probable upside, analysts plainly believe HealthStream is more favorable than Fresenius Medical Care AG & Co..

Institutional and Insider Ownership

3.0% of Fresenius Medical Care AG & Co. shares are held by institutional investors. Comparatively, 74.3% of HealthStream shares are held by institutional investors. 21.1% of HealthStream shares are held 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 Fresenius Medical Care AG & Co. and HealthStream’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fresenius Medical Care AG & Co. 7.04% 11.51% 5.00%
HealthStream 2.36% 2.46% 1.79%

Volatility & Risk

Fresenius Medical Care AG & Co. has a beta of 0.45, indicating that its share price is 55% less volatile than the S&P 500. Comparatively, HealthStream has a beta of 0.91, indicating that its share price is 9% less volatile than the S&P 500.

Earnings and Valuation

This table compares Fresenius Medical Care AG & Co. and HealthStream’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fresenius Medical Care AG & Co. $17.91 billion 1.86 $1.24 billion $2.23 24.35
HealthStream $225.97 million 3.33 $3.75 million $0.18 131.23

Fresenius Medical Care AG & Co. has higher revenue and earnings than HealthStream. Fresenius Medical Care AG & Co. is trading at a lower price-to-earnings ratio than HealthStream, indicating that it is currently the more affordable of the two stocks.

Dividends

Fresenius Medical Care AG & Co. pays an annual dividend of $0.37 per share and has a dividend yield of 0.7%. HealthStream does not pay a dividend. Fresenius Medical Care AG & Co. pays out 16.6% of its earnings in the form of a dividend. Fresenius Medical Care AG & Co. has raised its dividend for 2 consecutive years.

Summary

Fresenius Medical Care AG & Co. beats HealthStream on 10 of the 17 factors compared between the two stocks.

About Fresenius Medical Care AG & Co.

Fresenius Medical Care AG & Co. KGaA is a kidney dialysis company. The Company provides dialysis care and related services to persons suffering from end-stage renal disease (ESRD), as well as other healthcare services. The Company’s segments include North America Segment, the Europe, Middle East and Africa (EMEA) Segment, the Asia-Pacific Segment and the Latin America Segment. The Company develops and manufactures a range of dialysis machines, systems and disposable products. As of December 31, 2016, the Company sold its products to customers in more than 120 countries and also used in its internal healthcare service operations. The Company’s Care Coordination services include coordinated delivery of pharmacy services, vascular, cardiovascular and endovascular specialty services, non-dialysis laboratory testing services, physician services, hospitalist and intensivist services, health plan services, ambulatory surgery center services and urgent care services.

About HealthStream

HealthStream, Inc. (HealthStream) provides workforce, patient experience and provider solutions for healthcare organizations. The Company operates in three segments: HealthStream Workforce Solutions, HealthStream Patient Experience Solutions and HealthStream Provider Solutions. HealthStream’s products and services are organized into three segments: Workforce Solutions, Patient Experience Solutions, and Provider Solutions. HealthStream’s solutions are provided to a range of customers within the healthcare industry across the continuum of care. Delivered primarily as Software-as-a-Service (SaaS), the Company’s solutions focus on challenges facing the healthcare workforce and healthcare organizations, including the need to manage, retain, engage and develop healthcare workforce talent; meet compliance requirements; manage ongoing medical staff credentialing and privileging processes, and deliver patient experiences of care in healthcare organizations.

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