Analyzing HMS Holdings Corp (HMSY) and Kindred Healthcare (KND)

HMS Holdings Corp (NASDAQ: HMSY) and Kindred Healthcare (NYSE:KND) are both small-cap medical companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, valuation, profitability, dividends, risk and analyst recommendations.

Volatility & Risk

HMS Holdings Corp has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500. Comparatively, Kindred Healthcare has a beta of 1.22, suggesting that its share price is 22% more volatile than the S&P 500.

Profitability

This table compares HMS Holdings Corp and Kindred Healthcare’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HMS Holdings Corp 6.37% 9.26% 5.81%
Kindred Healthcare -7.06% -80.03% -7.16%

Dividends

Kindred Healthcare pays an annual dividend of $0.24 per share and has a dividend yield of 3.6%. HMS Holdings Corp does not pay a dividend. Kindred Healthcare pays out -1.9% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for HMS Holdings Corp and Kindred Healthcare, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HMS Holdings Corp 0 2 5 1 2.88
Kindred Healthcare 3 4 1 0 1.75

HMS Holdings Corp presently has a consensus price target of $23.06, indicating a potential upside of 14.11%. Kindred Healthcare has a consensus price target of $8.71, indicating a potential upside of 30.06%. Given Kindred Healthcare’s higher possible upside, analysts clearly believe Kindred Healthcare is more favorable than HMS Holdings Corp.

Insider & Institutional Ownership

93.1% of HMS Holdings Corp shares are held by institutional investors. Comparatively, 88.1% of Kindred Healthcare shares are held by institutional investors. 3.2% of HMS Holdings Corp shares are held by insiders. Comparatively, 3.0% of Kindred Healthcare shares are held 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.

Earnings and Valuation

This table compares HMS Holdings Corp and Kindred Healthcare’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
HMS Holdings Corp $495.50 million 3.43 $92.81 million $0.38 53.19
Kindred Healthcare $7.08 billion 0.08 $470.57 million ($12.82) -0.52

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

Summary

HMS Holdings Corp beats Kindred Healthcare on 10 of the 16 factors compared between the two stocks.

About HMS Holdings Corp

HMS Holdings Corp. is a holding company. The Company, through its subsidiaries, operates in the United States healthcare insurance benefit cost containment marketplace. It provides coordination of benefits services to government, and private healthcare payers and sponsors. Its payment integrity services ensure that healthcare claims billed are accurate and appropriate. It offers services to state Medicaid agencies, government health agencies and health plans, including Medicaid managed care, Medicare Advantage and group and individual health lines of business; government and private employers; and other healthcare payers and sponsors, including child support agencies. It serves approximately 45 state Medicaid programs and the District of Columbia, and government health agencies, including Centers for Medicare & Medicaid Services (CMS) and the Veterans Health Administration (VHA). It also provides services to approximately 250 health plans and supports their multiple lines of business.

About Kindred Healthcare

Kindred Healthcare, Inc., incorporated on March 27, 1998, is a healthcare services company. The Company, through its subsidiaries, operates transitional care (TC) hospitals, a home health, hospice and community care business, inpatient rehabilitation hospitals (IRFs), a contract rehabilitation services business, nursing centers and assisted living facilities across the United States. The Company operates through divisions: the Kindred at Home division, the hospital division, the Kindred Rehabilitation Services division and the nursing center division. These divisions represent six segments: home health services, hospice services, hospitals, Kindred Hospital Rehabilitation Services, RehabCare and nursing centers. The home health services and hospice services operating segments are contained within the Kindred at Home division while the Kindred Hospital Rehabilitation Services and RehabCare operating segments are both contained within the Kindred Rehabilitation Services division.

Receive News & Ratings for HMS Holdings Corp Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for HMS Holdings Corp and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply