Comparing HMS (NASDAQ:HMSY) & LifePoint Health (LPNT)

HMS (NASDAQ: HMSY) and LifePoint Health (NASDAQ:LPNT) are both small-cap medical companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, profitability, risk, earnings, valuation and institutional ownership.

Volatility & Risk

HMS has a beta of 0.87, suggesting that its stock price is 13% less volatile than the S&P 500. Comparatively, LifePoint Health has a beta of 0.67, suggesting that its stock price is 33% less volatile than the S&P 500.

Insider and Institutional Ownership

96.3% of HMS shares are owned by institutional investors. Comparatively, 99.2% of LifePoint Health shares are owned by institutional investors. 3.2% of HMS shares are owned by company insiders. Comparatively, 8.8% of LifePoint Health 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.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for HMS and LifePoint Health, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HMS 0 3 4 1 2.75
LifePoint Health 0 11 5 0 2.31

HMS presently has a consensus price target of $20.19, indicating a potential upside of 23.17%. LifePoint Health has a consensus price target of $59.17, indicating a potential upside of 27.51%. Given LifePoint Health’s higher probable upside, analysts plainly believe LifePoint Health is more favorable than HMS.

Earnings & Valuation

This table compares HMS and LifePoint Health’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
HMS $496.01 million 2.78 $37.63 million $0.29 56.52
LifePoint Health $7.27 billion 0.25 $121.90 million $4.22 11.00

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

Profitability

This table compares HMS and LifePoint Health’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HMS 4.94% 7.93% 4.93%
LifePoint Health 2.45% 7.01% 2.53%

Summary

HMS beats LifePoint Health on 8 of the 15 factors compared between the two stocks.

About HMS

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 LifePoint Health

LifePoint Health, Inc., through its subsidiaries, owns and operates community hospitals, regional health systems, physician practices, outpatient centers and post-acute facilities. As of December 31, 2016, the Company operated 72 hospital campuses in 22 states, having a total of 9,424 licensed beds. It offers a range of general and specialized healthcare services to patients through a network of hospitals and outpatient facilities. Its services include general surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic care, coronary care, rehabilitation services and pediatric services, and in some of its hospitals, the Company offers specialized services, such as open-heart surgery, skilled nursing, psychiatric care and neuro-surgery. It provides outpatient services, such as same-day surgery, laboratory, x-ray, respiratory therapy, imaging, sports medicine and lithotripsy.

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