Tabula Rasa HealthCare (NASDAQ:TRHC) and NEWTEK Business Services (NASDAQ:NEWT) are both small-cap medical companies, but which is the superior stock? We will compare the two businesses based on the strength of their profitability, earnings, institutional ownership, analyst recommendations, risk, dividends and valuation.

Institutional & Insider Ownership

80.5% of Tabula Rasa HealthCare shares are held by institutional investors. Comparatively, 20.2% of NEWTEK Business Services shares are held by institutional investors. 14.0% of Tabula Rasa HealthCare shares are held by company insiders. Comparatively, 6.3% of NEWTEK Business Services shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Risk & Volatility

Tabula Rasa HealthCare has a beta of 1.66, indicating that its share price is 66% more volatile than the S&P 500. Comparatively, NEWTEK Business Services has a beta of 1.4, indicating that its share price is 40% more volatile than the S&P 500.

Profitability

This table compares Tabula Rasa HealthCare and NEWTEK Business Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Tabula Rasa HealthCare -23.14% 7.76% 3.69%
NEWTEK Business Services 72.06% 9.05% 4.41%

Earnings & Valuation

This table compares Tabula Rasa HealthCare and NEWTEK Business Services’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Tabula Rasa HealthCare $204.27 million 6.02 -$47.27 million $0.34 171.24
NEWTEK Business Services $49.51 million 7.74 $35.68 million $1.94 10.45

NEWTEK Business Services has lower revenue, but higher earnings than Tabula Rasa HealthCare. NEWTEK Business Services is trading at a lower price-to-earnings ratio than Tabula Rasa HealthCare, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Tabula Rasa HealthCare and NEWTEK Business Services, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Tabula Rasa HealthCare 0 1 7 1 3.00
NEWTEK Business Services 0 1 2 0 2.67

Tabula Rasa HealthCare presently has a consensus price target of $87.37, suggesting a potential upside of 50.07%. NEWTEK Business Services has a consensus price target of $17.89, suggesting a potential downside of 11.77%. Given Tabula Rasa HealthCare’s stronger consensus rating and higher possible upside, research analysts plainly believe Tabula Rasa HealthCare is more favorable than NEWTEK Business Services.

Dividends

NEWTEK Business Services pays an annual dividend of $2.00 per share and has a dividend yield of 9.9%. Tabula Rasa HealthCare does not pay a dividend. NEWTEK Business Services pays out 103.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. NEWTEK Business Services has raised its dividend for 3 consecutive years.

Summary

Tabula Rasa HealthCare beats NEWTEK Business Services on 10 of the 18 factors compared between the two stocks.

About Tabula Rasa HealthCare

Tabula Rasa HealthCare, Inc. operates as a healthcare technology company in the United States. It offers medication risk management, pharmacy cost management, and medicare risk adjustment services. The company offers its technology-enabled products and services to prescribers, pharmacists, and healthcare organizations for medication risk management and risk adjustment. Tabula Rasa HealthCare, Inc. was founded in 2009 and is headquartered in Moorestown, New Jersey.

About NEWTEK Business Services

Newtek Business Services Corp. is a business development company specializing in providing financial and business services to the small-and medium-sized business market in the United States. The firm also seeks to invest in early stage businesses. The firm seeks to makes both debt and equity investments. Under debt investments, it focuses on first lien loans, which have terms of 1 to 25 years; second lien loans, which have terms of 5 to 25 years, and unsecured loans, which are provided to meet short-term funding needs and are repaid within 6 to 12 months. It operates through Electronic Payment Processing, Managed Technology Solutions, Small Business Finance, and Capcos segments. The company originates small business administration loans for the purpose of acquiring commercial real estate, machinery, equipment, and inventory, as well as to refinance debt and fund franchises, working capital, and business acquisitions; and offers small business loan servicing and consulting services to the Federal Deposit Insurance Corporation and various other financial institutions, as well as provides management services. Its electronic payment processing services include credit and debit card processing, check approval, ancillary processing equipment and software to merchants, eCommerce, electronic solutions to accept non-cash payments, check conversion, remote deposit capture, ACH processing, and electronic gift and loyalty card programs. The company also provides Website hosting, dedicated server, and cloud hosting services; Web design and development; Internet marketing; data storage and backup and other related services; and ecommerce services, such as payment processing, online shopping cart tools, Website design and Web related services; Accounts Receivable Financing, and The Secure Gateway. In addition, it offers Newtek Advantage, a mobile, real-time operating platform enabling a business to access data on a smartphone, tablet, laptop, or PC for eCommerce, credit/debit transactions, Website statistics, payroll, insurance, and business loans. Further, the company sells personal, commercial, and health/benefits lines of insurance products; and payroll management processing and employee tax filing services. It has strategic alliances with American International Group, CTAA, Navy Federal Credit Union, Credit Union National Association, Pershing, and others to provide agent services to small business clients. The firm seeks to invest in New York and Louisiana area. The firm seeks to invest $0.3 million to $3 million in businesses. It provides small business terms loans ranging from $0.05 million to $10 million. The firm also provides account receivable financing ranging from $0.05 million to $1.5 million. It also provides $0.05 million to $10 million financing to owner occupied real estate businesses whose average net income over the last 2 years must not exceed $2.5 million. Newtek Business Services Corp., formerly known as Newtek Business Services Inc., was incorporated on August 26, 2013 and is headquartered in Lake Success, New York with additional offices in Garden City, New York; Miami, Florida; Milwaukee, Wisconsin; New Orleans, Louisiana; and New York, New York.

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