Covalon Technologies (OTCMKTS:CVALF) and The Pennant Group (NASDAQ:PNTG) are both small-cap medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Covalon Technologies and The Pennant Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Covalon Technologies 0 0 0 0 N/A
The Pennant Group 0 2 1 0 2.33

The Pennant Group has a consensus target price of $34.50, indicating a potential downside of 7.08%. Given The Pennant Group’s higher possible upside, analysts clearly believe The Pennant Group is more favorable than Covalon Technologies.

Institutional and Insider Ownership

80.4% of The Pennant Group shares are owned by institutional investors. 10.4% of The Pennant Group shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Covalon Technologies and The Pennant Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Covalon Technologies -31.61% -64.32% -21.48%
The Pennant Group 1.39% 22.16% 4.00%

Valuation & Earnings

This table compares Covalon Technologies and The Pennant Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Covalon Technologies $25.61 million 0.98 -$6.88 million N/A N/A
The Pennant Group $338.53 million 3.07 $2.55 million $0.52 71.40

The Pennant Group has higher revenue and earnings than Covalon Technologies.

Summary

The Pennant Group beats Covalon Technologies on 11 of the 11 factors compared between the two stocks.

Covalon Technologies Company Profile

Covalon Technologies Ltd. researches, develops, manufactures, commercializes, and licenses medical technologies and products in the United States, Canada, Europe, the Middle East, Asia, Latin America, and internationally. The company has three platform technologies, including collagen matrix platform that is used to manufacture a family of products that treat chronic and infected wounds, such as diabetic ulcers, pressure ulcers, venous ulcers, donor and graft sites, traumatic wounds healing by secondary intention, dehisced surgical wounds, and first and second degree burns; antimicrobial silicone adhesive platform, which is used in a family of pre and post-surgical, and vascular access products that are designed to kill bacteria or yeast that comes into contact with the antimicrobial silicone; and medical coating platform, a proprietary process that utilizes photo-polymerization to create active grafting sites where new polymer chains are initiated and propagated from the surface of an existing medical device. It sells wound care dressing, surgical and peri-operative, and infection management products under the Covalon brand name. The company also offers development contracts, licensing agreements, and distribution contracts services. It provides its technologies, products, and services to various health care providers, such as hospitals, wound care centers, burn centers, extended/alternate care and acute care facilities, home health care agencies, and physicians' offices. The company is headquartered in Mississauga, Canada.

The Pennant Group Company Profile

The Pennant Group, Inc. offers home health, hospice, and senior living services across Arizona, California, Colorado, Idaho, Iowa, Nevada, Oklahoma, Oregon, Texas, Utah, Washington, Wisconsin, and Wyoming. It operates in two segments, Home Health and Hospice Services, and Senior Living Services. The company offers home health services, including clinical services, such as nursing, speech, occupational and physical therapy, medical social work, and home health aide services; and hospice services comprising clinical care, education, and counseling services for the physical, spiritual, and psychosocial needs of terminally ill patients and their families. It also provides senior living services, such as residential accommodations, activities, and meals, as well as housekeeping and assistance in the activities of daily living to seniors, who are independent or who require some support. As of June 30, 2019, the company provided home health and hospice services through 62 agencies; and assisted living, independent living, and memory care services in 51 communities with 3,872 total units. The Pennant Group, Inc. was incorporated in 2019 and is headquartered in Eagle, Idaho. The Pennant Group, Inc. operates independently of The Ensign Group, Inc. as of October 1, 2019.

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