Adeptus Health (NYSE: ADPT) and Community Health Systems (NYSE:CYH) are both medical companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, earnings, institutional ownership, profitabiliy, dividends, risk and analyst recommendations.

Profitability

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

Net Margins Return on Equity Return on Assets
Adeptus Health -15.26% -12.30% -5.99%
Community Health Systems -10.77% 1.79% 0.15%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Adeptus Health and Community Health Systems, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Adeptus Health 2 3 2 0 2.00
Community Health Systems 4 11 1 0 1.81

Adeptus Health presently has a consensus price target of $37.00, indicating a potential upside of 2,524.11%. Community Health Systems has a consensus price target of $8.45, indicating a potential downside of 9.47%. Given Adeptus Health’s stronger consensus rating and higher probable upside, analysts plainly believe Adeptus Health is more favorable than Community Health Systems.

Insider and Institutional Ownership

95.8% of Community Health Systems shares are owned by institutional investors. 34.7% of Adeptus Health shares are owned by company insiders. Comparatively, 4.6% of Community Health Systems shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Adeptus Health and Community Health Systems’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Adeptus Health N/A N/A N/A $5.72 0.25
Community Health Systems $17.92 billion 0.06 $1.90 billion ($17.40) -0.54

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

Volatility and Risk

Adeptus Health has a beta of 0.34, indicating that its share price is 66% less volatile than the S&P 500. Comparatively, Community Health Systems has a beta of 1.84, indicating that its share price is 84% more volatile than the S&P 500.

Summary

Community Health Systems beats Adeptus Health on 6 of the 11 factors compared between the two stocks.

Adeptus Health Company Profile

Adeptus Health Inc. is a patient-centered healthcare company. The Company is engaged in providing emergency medical care through a network of independent freestanding emergency rooms in the United States and partnerships with various healthcare systems. The Company has approximately 80 freestanding facilities and over two licensed general hospitals. It owns or operates facilities located in the Houston, Dallas/Fort Worth, San Antonio and Austin, Texas markets; Colorado Springs and Denver, Colorado markets, and Phoenix, Arizona market. Its freestanding emergency room facilities typically range from 6,000 to 7,000 square feet. Each facility has 6 to 9 emergency exam rooms, which include over two high-acuity suites, one child-friendly pediatric room, and a specialized obstetrics/gynecology room. Its radiology suites have in-house diagnostic imaging technology, including computerized tomography (CT) scanners, digital x-rays and ultrasounds, with final reads from on-call radiologists.

Community Health Systems Company Profile

Community Health Systems, Inc. is an operator of general acute care hospitals and outpatient facilities in communities across the country. The Company operates through hospital operations segment, which includes its general acute care hospitals and related healthcare entities that provide inpatient and outpatient healthcare services. The Company provides healthcare services through the hospitals that it owns and operates and affiliated businesses in non-urban and selected urban markets throughout the United States. The services provided through its hospitals and affiliated businesses include general acute care, emergency room, general and specialty surgery, critical care, internal medicine, obstetrics, diagnostic, psychiatric and rehabilitation services. The Company also provides additional outpatient services at urgent care centers, occupational medicine clinics, imaging centers, cancer centers, ambulatory surgery centers, and home health and hospice agencies.

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