AMN Healthcare Services (NYSE: AMN) and Healthways (NASDAQ:TVTY) are both small-cap medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, risk, valuation, institutional ownership, profitabiliy, dividends and analyst recommendations.

Insider & Institutional Ownership

100.0% of AMN Healthcare Services shares are owned by institutional investors. 2.5% of AMN Healthcare Services shares are owned by insiders. Comparatively, 8.4% of Healthways shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares AMN Healthcare Services and Healthways’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AMN Healthcare Services 5.80% 27.77% 10.31%
Healthways -18.90% 37.59% 11.18%

Analyst Ratings

This is a breakdown of recent recommendations for AMN Healthcare Services and Healthways, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AMN Healthcare Services 0 1 3 0 2.75
Healthways 0 1 7 0 2.88

AMN Healthcare Services currently has a consensus target price of $46.00, indicating a potential upside of 29.21%. Healthways has a consensus target price of $32.19, indicating a potential downside of 15.30%. Given AMN Healthcare Services’ higher probable upside, analysts plainly believe AMN Healthcare Services is more favorable than Healthways.

Risk and Volatility

AMN Healthcare Services has a beta of 0.54, indicating that its stock price is 46% less volatile than the S&P 500. Comparatively, Healthways has a beta of 0.52, indicating that its stock price is 48% less volatile than the S&P 500.

Earnings and Valuation

This table compares AMN Healthcare Services and Healthways’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
AMN Healthcare Services $1.93 billion 0.88 $226.88 million $2.27 15.68
Healthways $515.96 million 2.89 $109.39 million ($2.72) -13.97

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

Summary

AMN Healthcare Services beats Healthways on 7 of the 13 factors compared between the two stocks.

About AMN Healthcare Services

AMN Healthcare Services, Inc. provides healthcare workforce solutions and staffing services at acute and sub-acute care hospitals and other healthcare facilities throughout the United States. The Company’s segments include nurse and allied solutions, locum tenens solutions and other workforce solutions. Through its suite of solutions, the Company provides technology, analytics and services to build and manage all or a portion of its clients’ healthcare workforce needs, from nurses, doctors and allied health professionals to healthcare leaders and executives. It offers managed services programs, vendor management systems, predictive analytics, workforce optimization consulting, recruitment process outsourcing, interim and executive leadership, and remote medical coding. It offers various services, including travel nurse staffing; local, or per diem, staffing; locum tenens staffing; allied staffing; physician permanent placement services, and health information management.

About Healthways

Tivity Health, Inc., formerly Healthways, Inc., is focused targeted population health for those aged 50 and older. The Company offers three programs: SilverSneakers senior fitness, Prime fitness and WholeHealth Living. The SilverSneakers senior fitness program is offered to members of Medicare Advantage, Medicare Supplement, and Group Retiree plans. The Company also offers Prime fitness, a fitness facility access program, through commercial health plans, employers and insurance exchanges. Its national network of fitness centers delivers both SilverSneakers and Prime fitness. As of December 31, 2016, the Company’s fitness networks encompassed approximately 16,000 participating locations and more than 1,000 alternative locations that provide classes outside of traditional fitness centers. As of December 31, 2016, the Company’s WholeHealth Living network included over 88,000 complementary, alternative, and physical medicine practitioners to serve individuals through health plans.

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