Surgical Care Affiliates (NASDAQ: SCAI) and Select Medical Holdings Corporation (NYSE:SEM) are both healthcare companies, but which is the superior stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, dividends, risk, earnings, profitabiliy and valuation.

Earnings & Valuation

This table compares Surgical Care Affiliates and Select Medical Holdings Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Surgical Care Affiliates N/A N/A N/A $0.55 101.58
Select Medical Holdings Corporation $4.24 billion 0.44 $458.06 million $0.58 24.40

Select Medical Holdings Corporation has higher revenue and earnings than Surgical Care Affiliates. Select Medical Holdings Corporation is trading at a lower price-to-earnings ratio than Surgical Care Affiliates, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Surgical Care Affiliates has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500. Comparatively, Select Medical Holdings Corporation has a beta of 1.49, indicating that its stock price is 49% more volatile than the S&P 500.

Insider & Institutional Ownership

80.1% of Select Medical Holdings Corporation shares are held by institutional investors. 3.3% of Surgical Care Affiliates shares are held by company insiders. Comparatively, 19.9% of Select Medical Holdings Corporation shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and price targets for Surgical Care Affiliates and Select Medical Holdings Corporation, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Surgical Care Affiliates 0 4 1 0 2.20
Select Medical Holdings Corporation 1 1 2 0 2.25

Surgical Care Affiliates currently has a consensus target price of $49.00, suggesting a potential downside of 12.30%. Select Medical Holdings Corporation has a consensus target price of $14.33, suggesting a potential upside of 1.30%. Given Select Medical Holdings Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe Select Medical Holdings Corporation is more favorable than Surgical Care Affiliates.

Profitability

This table compares Surgical Care Affiliates and Select Medical Holdings Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Surgical Care Affiliates 21.52% 13.07% 12.83%
Select Medical Holdings Corporation 1.77% 8.06% 1.59%

Summary

Select Medical Holdings Corporation beats Surgical Care Affiliates on 8 of the 11 factors compared between the two stocks.

About Surgical Care Affiliates

Surgical Care Affiliates, Inc. is a provider of solutions to physicians, health plans and health systems to optimize surgical care. The Company offers tools and systems in the areas of clinical benchmarking, clinical best practices, operating efficiency, care coordination and supply chain management. As of December 31, 2016, the Company operated a network of surgical facilities in the United States, which included 197 ambulatory surgery centers (ASCs) and seven surgical hospitals in partnership with approximately 3,000 physician partners. The Company’s operations consist of its ownership and management of ASCs and surgical hospitals. Its ASCs provide the facilities, equipment, supplies and clinical support staff necessary to provide non-emergency surgical services to patients not requiring hospitalization. Its surgical hospitals allow physicians to perform a range of surgical procedures, including surgeries, and allow patients to stay in the hospital for several nights to recover.

About Select Medical Holdings Corporation

Select Medical Holdings Corporation is an operator of specialty hospitals, outpatient rehabilitation clinics and occupational medicine centers in the United States. The Company’s segments include specialty hospitals, outpatient rehabilitation, Concentra and Other. The specialty hospitals segment consists of hospitals designed to serve the needs of long term acute patients and hospitals designed to serve patients that require intensive medical rehabilitation care. The outpatient rehabilitation segment consists of clinics that provide physical, occupational, and speech rehabilitation services. The Concentra segment consists of medical centers and contract services provided at employer worksites and Department of Veterans Affairs community-based outpatient clinics (CBOCs) that deliver occupational medicine, physical therapy, veteran’s healthcare, and consumer health services. As of December 31, 2016, the Company had operations in 46 states and the District of Columbia.

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