Reviewing HCA Healthcare (HCA) and Acadia Healthcare (ACHC)

HCA Healthcare (NYSE: HCA) and Acadia Healthcare (NASDAQ:ACHC) are both healthcare companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, institutional ownership, risk, valuation, dividends, earnings and analyst recommendations.

Analyst Recommendations

This is a summary of current recommendations and price targets for HCA Healthcare and Acadia Healthcare, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HCA Healthcare 2 5 16 0 2.61
Acadia Healthcare 0 6 8 0 2.57

HCA Healthcare presently has a consensus price target of $104.05, indicating a potential upside of 3.49%. Acadia Healthcare has a consensus price target of $43.42, indicating a potential upside of 10.81%. Given Acadia Healthcare’s higher probable upside, analysts clearly believe Acadia Healthcare is more favorable than HCA Healthcare.

Profitability

This table compares HCA Healthcare and Acadia Healthcare’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HCA Healthcare 4.89% -49.49% 7.21%
Acadia Healthcare 6.07% 8.57% 3.22%

Institutional & Insider Ownership

74.1% of HCA Healthcare shares are owned by institutional investors. 2.9% of HCA Healthcare shares are owned by company insiders. Comparatively, 11.1% of Acadia Healthcare shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares HCA Healthcare and Acadia Healthcare’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
HCA Healthcare $47.65 billion 0.74 $2.22 billion $5.11 19.68
Acadia Healthcare $2.85 billion 1.21 $6.14 million $1.96 19.99

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

Volatility & Risk

HCA Healthcare has a beta of 0.48, indicating that its stock price is 52% less volatile than the S&P 500. Comparatively, Acadia Healthcare has a beta of 0.85, indicating that its stock price is 15% less volatile than the S&P 500.

HCA Healthcare Company Profile

HCA Healthcare, Inc., formerly HCA Holdings, Inc., is a holding company. The Company, through its subsidiaries, owns and operates hospitals and related healthcare entities. As of December 31, 2016, the Company operated in two geographically organized groups, including the National and American Groups. As of December 31, 2016, the National Group included 84 hospitals, which were located in Alaska, California, Florida, southern Georgia, Idaho, Indiana, northern Kentucky, Nevada, New Hampshire, South Carolina, Utah and Virginia. As of December 31, 2016, the American Group included 80 hospitals, which were located in Colorado, northern Georgia, Kansas, southern Kentucky, Louisiana, Mississippi, Missouri, Oklahoma, Tennessee and Texas. As of December 31, 2016, the Company operated six hospitals in England. The Company owns, manages or operates hospitals, freestanding surgery centers and freestanding emergency care facilities, walk-in clinics, diagnostic and imaging centers, among others.

Acadia Healthcare Company Profile

Acadia Healthcare Company, Inc. is a provider of behavioral healthcare services, with operations in the United States and the United Kingdom. The Company focuses on acquiring and developing behavioral healthcare facilities. The Company operates through two segments: U.S. Facilities and U.K. Facilities. The Company is engaged in operating acute inpatient psychiatric facilities, specialty treatment facilities, residential treatment centers and facilities providing outpatient behavioral healthcare services. As of December 31, 2016, the U.S. Facilities segment included 208 behavioral healthcare facilities with approximately 8,500 beds in 39 states and Puerto Rico, and the U.K. Facilities segment included 365 behavioral healthcare facilities with approximately 8,600 beds in the United Kingdom. As of December 31, 2016, the Company had operated 573 behavioral healthcare facilities with approximately 17,100 beds in 39 states, the United Kingdom and Puerto Rico.

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