LifePoint Health (NASDAQ: LPNT) and Tenet Healthcare Corporation (NYSE:THC) are both medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, profitability, institutional ownership, earnings and analyst recommendations.

Analyst Ratings

This is a summary of recent recommendations and price targets for LifePoint Health and Tenet Healthcare Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LifePoint Health 2 8 3 0 2.08
Tenet Healthcare Corporation 0 9 5 0 2.36

LifePoint Health currently has a consensus price target of $65.50, suggesting a potential upside of 16.13%. Tenet Healthcare Corporation has a consensus price target of $21.25, suggesting a potential upside of 23.47%. Given Tenet Healthcare Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Tenet Healthcare Corporation is more favorable than LifePoint Health.

Insider & Institutional Ownership

99.5% of LifePoint Health shares are held by institutional investors. 7.3% of LifePoint Health shares are held by company insiders. Comparatively, 3.1% of Tenet Healthcare Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares LifePoint Health and Tenet Healthcare Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LifePoint Health 2.61% 7.40% 2.66%
Tenet Healthcare Corporation -0.97% -2.00% -0.09%

Valuation & Earnings

This table compares LifePoint Health and Tenet Healthcare Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
LifePoint Health $6.42 billion 0.35 $760.40 million $4.48 12.59
Tenet Healthcare Corporation $19.32 billion 0.09 $2.07 billion ($1.95) -8.83

Tenet Healthcare Corporation has higher revenue and earnings than LifePoint Health. Tenet Healthcare Corporation is trading at a lower price-to-earnings ratio than LifePoint Health, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

LifePoint Health has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500. Comparatively, Tenet Healthcare Corporation has a beta of 1.29, suggesting that its stock price is 29% more volatile than the S&P 500.

Summary

LifePoint Health beats Tenet Healthcare Corporation on 7 of the 13 factors compared between the two stocks.

LifePoint Health Company Profile

LifePoint Health, Inc., through its subsidiaries, owns and operates community hospitals, regional health systems, physician practices, outpatient centers and post-acute facilities. As of December 31, 2016, the Company operated 72 hospital campuses in 22 states, having a total of 9,424 licensed beds. It offers a range of general and specialized healthcare services to patients through a network of hospitals and outpatient facilities. Its services include general surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic care, coronary care, rehabilitation services and pediatric services, and in some of its hospitals, the Company offers specialized services, such as open-heart surgery, skilled nursing, psychiatric care and neuro-surgery. It provides outpatient services, such as same-day surgery, laboratory, x-ray, respiratory therapy, imaging, sports medicine and lithotripsy.

Tenet Healthcare Corporation Company Profile

Tenet Healthcare Corporation (Tenet) is a healthcare services company. The Company operates regionally focused, integrated healthcare delivery networks in large urban and suburban markets in the United States. The Company’s segments include Hospital Operations and Other, Ambulatory Care and Conifer. As of December 31, 2016, its subsidiaries operated 79 hospitals, including three academic medical centers, two children’s hospitals, two specialty hospitals and one critical access hospital. The Company’s Ambulatory Care segment includes the operations of its USPI joint venture and its Aspen facilities. As of December 31, 2016, Conifer provided one or more of the business process services described above from 20 service centers to more than 800 Tenet and non-Tenet hospital and other clients in over 40 states. As of December 31, 2016, the Company operated 20 short-stay surgical hospitals, over 470 outpatient centers, and nine facilities in the United Kingdom.

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