Head-To-Head Contrast: Community Health Systems (CYH) and Quorum Health (QHC)

Community Health Systems (NYSE: CYH) and Quorum Health (NYSE:QHC) are both small-cap medical 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.

Earnings and Valuation

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This table compares Community Health Systems and Quorum Health’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Community Health Systems $15.35 billion 0.03 -$2.46 billion ($1.20) -3.19
Quorum Health $2.07 billion 0.12 -$114.19 million ($1.30) -6.27

Quorum Health has lower revenue, but higher earnings than Community Health Systems. Quorum Health is trading at a lower price-to-earnings ratio than Community Health Systems, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Community Health Systems and Quorum Health’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Community Health Systems -16.01% -14.18% -0.63%
Quorum Health -5.51% -34.01% -2.58%

Institutional & Insider Ownership

87.1% of Quorum Health shares are owned by institutional investors. 3.8% of Community Health Systems shares are owned by company insiders. Comparatively, 4.7% of Quorum 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.

Volatility & Risk

Community Health Systems has a beta of 1.59, indicating that its stock price is 59% more volatile than the S&P 500. Comparatively, Quorum Health has a beta of 1.54, indicating that its stock price is 54% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations and price targets for Community Health Systems and Quorum Health, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Community Health Systems 6 10 0 0 1.63
Quorum Health 0 4 0 0 2.00

Community Health Systems presently has a consensus price target of $5.50, indicating a potential upside of 43.60%. Quorum Health has a consensus price target of $3.88, indicating a potential downside of 52.45%. Given Community Health Systems’ higher probable upside, equities research analysts clearly believe Community Health Systems is more favorable than Quorum Health.

Summary

Community Health Systems beats Quorum Health on 7 of the 13 factors compared between the two stocks.

About Community Health Systems

Community Health Systems, Inc., together with its subsidiaries, owns, leases, and operates general acute care hospitals in the United States. It offers general acute care, emergency room, general and specialty surgery, critical care, internal medicine, obstetrics, diagnostic, psychiatric, and rehabilitation services, as well as skilled nursing and home care services. The company also provides outpatient services at urgent care centers, occupational medicine clinics, imaging centers, cancer centers, and ambulatory surgery centers. As of December 31, 2017, it owned or leased 125 hospitals, including 123 general acute care hospitals and 2 stand-alone rehabilitation or psychiatric hospitals with an aggregate of 20,850 licensed beds in 19 states. The company was founded in 1985 and is headquartered in Franklin, Tennessee.

About Quorum Health

Quorum Health Corporation provides hospital and outpatient healthcare services in the United States. Its general hospital and outpatient healthcare services include general acute care, emergency room, general and specialty surgery, critical care, internal medicine, obstetric, diagnostic, psychiatric, and rehabilitation services. Quorum Health Corporation offers its healthcare services through its hospitals and affiliated facilities, including urgent care centers, diagnostic and imaging centers, physician clinics, and surgery centers. The company, through its subsidiary, Quorum Health Resources, LLC, provides management advisory and consulting services to non-affiliated hospitals. As of January 5, 2018, it owned or leased 31 hospitals with an aggregate of approximately 3,000 licensed beds. The company was incorporated in 2015 and is headquartered in Brentwood, Tennessee.

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