Contrasting Kindred Healthcare (KND) and Acadia Healthcare (ACHC)

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

Valuation & Earnings

This table compares Acadia Healthcare and Kindred Healthcare’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Acadia Healthcare $2.85 billion 1.00 $6.14 million $1.96 16.51
Kindred Healthcare $7.22 billion 0.12 -$664.23 million ($1.97) -4.92

Acadia Healthcare has higher earnings, but lower revenue than Kindred Healthcare. Kindred 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.

Institutional and Insider Ownership

89.6% of Kindred Healthcare shares are owned by institutional investors. 11.1% of Acadia Healthcare shares are owned by insiders. Comparatively, 3.0% of Kindred Healthcare shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Dividends

Kindred Healthcare pays an annual dividend of $0.12 per share and has a dividend yield of 1.2%. Acadia Healthcare does not pay a dividend. Kindred Healthcare pays out -6.1% of its earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Acadia Healthcare and Kindred Healthcare, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Acadia Healthcare 0 6 8 0 2.57
Kindred Healthcare 1 4 1 0 2.00

Acadia Healthcare currently has a consensus price target of $43.83, suggesting a potential upside of 35.46%. Kindred Healthcare has a consensus price target of $8.83, suggesting a potential downside of 8.93%. Given Acadia Healthcare’s stronger consensus rating and higher possible upside, equities analysts plainly believe Acadia Healthcare is more favorable than Kindred Healthcare.

Profitability

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

Net Margins Return on Equity Return on Assets
Acadia Healthcare 6.07% 8.57% 3.22%
Kindred Healthcare -8.06% 2.29% 0.30%

Risk and Volatility

Acadia Healthcare has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500. Comparatively, Kindred Healthcare has a beta of 1.21, suggesting that its stock price is 21% more volatile than the S&P 500.

Summary

Acadia Healthcare beats Kindred Healthcare on 11 of the 16 factors compared between the two stocks.

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.

Kindred Healthcare Company Profile

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.

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