Surgery Partners (NASDAQ: SGRY) and Premier (NASDAQ:PINC) are both medical companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.

Earnings and Valuation

This table compares Surgery Partners and Premier’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Surgery Partners $1.13 billion 0.45 $231.39 million $0.15 69.00
Premier $1.45 billion 1.20 $440.72 million ($6.33) -5.15

Premier has higher revenue and earnings than Surgery Partners. Premier is trading at a lower price-to-earnings ratio than Surgery Partners, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Surgery Partners and Premier’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Surgery Partners 0.63% 6.02% 0.81%
Premier 0.66% -16.27% 10.59%

Institutional and Insider Ownership

38.1% of Surgery Partners shares are owned by institutional investors. Comparatively, 37.8% of Premier shares are owned by institutional investors. 7.5% of Surgery Partners shares are owned by insiders. Comparatively, 17.1% of Premier shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Surgery Partners has a beta of 2.05, suggesting that its stock price is 105% more volatile than the S&P 500. Comparatively, Premier has a beta of 0.46, suggesting that its stock price is 54% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for Surgery Partners and Premier, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Surgery Partners 1 2 4 0 2.43
Premier 1 1 7 0 2.67

Surgery Partners currently has a consensus target price of $18.80, indicating a potential upside of 81.64%. Premier has a consensus target price of $39.60, indicating a potential upside of 21.58%. Given Surgery Partners’ higher probable upside, equities research analysts clearly believe Surgery Partners is more favorable than Premier.

Summary

Premier beats Surgery Partners on 8 of the 14 factors compared between the two stocks.

About Surgery Partners

Surgery Partners, Inc. is a healthcare services company. The Company operates in three lines of business across the United States: Surgical Facility Services, Ancillary Services and Optical Services. The Company’s Surgical Facility Services segment consists of the operation of ambulatory surgery centers (ASCs) and surgical hospitals, which include its anesthesia services. The Company’s surgical facilities primarily provide non-emergency surgical procedures across a range of specialties, which include gastrointestinal (GI), general surgery, ophthalmology, orthopedics and pain management. The Company’s Ancillary Services segment consists of a diagnostic laboratory, a specialty pharmacy and multi-specialty physician practices. The Company’s physician practices include its owned and operated physician practices pursuant to long-term management service agreements. The Company’s Optical Services segment consists of an optical laboratory, an optical products group purchasing organization.

About Premier

Premier, Inc. is a healthcare improvement company. The Company is uniting an alliance of approximately 3,750 United States hospitals and more than 130,000 other provider organizations to transform healthcare. The Company operates healthcare group purchasing organizations and also provides integrated data and analytics, supply chain solutions, advisory services, performance improvement collaborative and other services. The Company plays a role in the healthcare industry, collaborating with members to co-develop long-term innovations that reinvent and improve the way care is delivered to patients nationwide.

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