Mednax (MD) & HealthStream (HSTM) Financial Comparison

Mednax (NYSE: MD) and HealthStream (NASDAQ:HSTM) are both medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, earnings, profitability, institutional ownership, valuation and risk.

Risk & Volatility

Mednax has a beta of 0.32, meaning that its stock price is 68% less volatile than the S&P 500. Comparatively, HealthStream has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Mednax and HealthStream, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mednax 1 8 2 0 2.09
HealthStream 0 4 2 0 2.33

Mednax presently has a consensus target price of $54.50, suggesting a potential upside of 17.66%. HealthStream has a consensus target price of $24.40, suggesting a potential upside of 2.87%. Given Mednax’s higher probable upside, equities analysts clearly believe Mednax is more favorable than HealthStream.

Valuation & Earnings

This table compares Mednax and HealthStream’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Mednax $3.18 billion 1.36 $324.91 million $2.83 16.37
HealthStream $225.97 million 3.35 $3.75 million $0.18 131.78

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

Profitability

This table compares Mednax and HealthStream’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mednax 7.76% 10.80% 5.57%
HealthStream 2.36% 2.46% 1.79%

Insider & Institutional Ownership

96.3% of Mednax shares are held by institutional investors. Comparatively, 76.7% of HealthStream shares are held by institutional investors. 2.4% of Mednax shares are held by insiders. Comparatively, 21.1% of HealthStream shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Summary

Mednax beats HealthStream on 8 of the 13 factors compared between the two stocks.

Mednax Company Profile

MEDNAX, Inc. is a provider of physician services, including newborn, anesthesia, maternal-fetal, teleradiology, pediatric cardiology and other pediatric subspecialty care. As of December 31, 2016, the Company’s national network consisted of over 3,600 affiliated physicians, including over 1,130 physicians providing neonatal clinical care, in 35 states and Puerto Rico, primarily within hospital-based neonatal intensive care units (NICUs), to babies born prematurely or with medical complications. As of December 31, 2016, the Company had over 1,390 affiliated physicians providing anesthesia care to patients in connection with surgical and other procedures, as well as pain management. As of December 31, 2016, the Company had 270 affiliated physicians providing maternal-fetal and obstetrical medical care to expectant mothers experiencing complicated pregnancies primarily in areas where its affiliated neonatal physicians practice.

HealthStream Company Profile

HealthStream, Inc. (HealthStream) provides workforce, patient experience and provider solutions for healthcare organizations. The Company operates in three segments: HealthStream Workforce Solutions, HealthStream Patient Experience Solutions and HealthStream Provider Solutions. HealthStream’s products and services are organized into three segments: Workforce Solutions, Patient Experience Solutions, and Provider Solutions. HealthStream’s solutions are provided to a range of customers within the healthcare industry across the continuum of care. Delivered primarily as Software-as-a-Service (SaaS), the Company’s solutions focus on challenges facing the healthcare workforce and healthcare organizations, including the need to manage, retain, engage and develop healthcare workforce talent; meet compliance requirements; manage ongoing medical staff credentialing and privileging processes, and deliver patient experiences of care in healthcare organizations.

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