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

Risk & Volatility

Premier has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500. Comparatively, Surgery Partners has a beta of 2.02, suggesting that its share price is 102% more volatile than the S&P 500.

Valuation & Earnings

This table compares Premier and Surgery Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Premier $1.45 billion 1.17 $440.72 million ($6.33) -5.05
Surgery Partners $1.13 billion 0.41 $231.39 million $0.15 64.00

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.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Premier and Surgery Partners, as reported by MarketBeat.com.

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

Premier presently has a consensus price target of $39.60, indicating a potential upside of 23.83%. Surgery Partners has a consensus price target of $18.80, indicating a potential upside of 95.83%. Given Surgery Partners’ higher possible upside, analysts plainly believe Surgery Partners is more favorable than Premier.

Institutional and Insider Ownership

37.8% of Premier shares are owned by institutional investors. Comparatively, 38.1% of Surgery Partners shares are owned by institutional investors. 17.1% of Premier shares are owned by insiders. Comparatively, 7.5% of Surgery Partners shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

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

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

Summary

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

Premier Company Profile

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.

Surgery Partners Company Profile

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.

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