Acadia Healthcare (NASDAQ: ACHC) and Tenet Healthcare Corporation (NYSE:THC) are both medical companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.

Profitability

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

Net Margins Return on Equity Return on Assets
Acadia Healthcare 0.30% 8.69% 3.16%
Tenet Healthcare Corporation -0.97% -2.00% -0.09%

Volatility and Risk

Acadia Healthcare has a beta of 1.15, meaning that its share price is 15% more volatile than the S&P 500. Comparatively, Tenet Healthcare Corporation has a beta of 1.29, meaning that its share price is 29% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and target prices for Acadia Healthcare and Tenet Healthcare Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Acadia Healthcare 0 3 9 1 2.85
Tenet Healthcare Corporation 0 9 6 0 2.40

Acadia Healthcare currently has a consensus target price of $59.67, indicating a potential upside of 13.91%. Tenet Healthcare Corporation has a consensus target price of $22.69, indicating a potential upside of 61.51%. Given Tenet Healthcare Corporation’s higher probable upside, analysts clearly believe Tenet Healthcare Corporation is more favorable than Acadia Healthcare.

Earnings and Valuation

This table compares Acadia Healthcare and Tenet Healthcare Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Acadia Healthcare $2.83 billion 1.63 $574.61 million $0.09 582.00
Tenet Healthcare Corporation $19.32 billion 0.07 $2.07 billion ($1.95) -7.21

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

Summary

Acadia Healthcare beats Tenet Healthcare Corporation on 8 of the 12 factors compared between the two stocks.

About Acadia Healthcare

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.

About Tenet Healthcare Corporation

Tenet Healthcare Corporation (Tenet) is a healthcare services company. The Company operates regionally focused, integrated healthcare delivery networks in large urban and suburban markets in the United States. The Company’s segments include Hospital Operations and Other, Ambulatory Care and Conifer. As of December 31, 2016, its subsidiaries operated 79 hospitals, including three academic medical centers, two children’s hospitals, two specialty hospitals and one critical access hospital. The Company’s Ambulatory Care segment includes the operations of its USPI joint venture and its Aspen facilities. As of December 31, 2016, Conifer provided one or more of the business process services described above from 20 service centers to more than 800 Tenet and non-Tenet hospital and other clients in over 40 states. As of December 31, 2016, the Company operated 20 short-stay surgical hospitals, over 470 outpatient centers, and nine facilities in the United Kingdom.

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