Natus Medical (NASDAQ: BABY) and Alliance HealthCare Services (NASDAQ:AIQ) are both medical companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, profitability, earnings, institutional ownership and valuation.

Analyst Recommendations

This is a summary of recent ratings and target prices for Natus Medical and Alliance HealthCare Services, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Natus Medical 1 1 1 0 2.00
Alliance HealthCare Services 0 0 0 0 N/A

Natus Medical currently has a consensus price target of $47.00, indicating a potential upside of 42.86%. Given Natus Medical’s higher possible upside, research analysts clearly believe Natus Medical is more favorable than Alliance HealthCare Services.

Profitability

This table compares Natus Medical and Alliance HealthCare Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Natus Medical 4.20% 12.09% 8.06%
Alliance HealthCare Services 3.63% N/A 3.07%

Volatility & Risk

Natus Medical has a beta of 0.96, meaning that its stock price is 4% less volatile than the S&P 500. Comparatively, Alliance HealthCare Services has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500.

Valuation & Earnings

This table compares Natus Medical and Alliance HealthCare Services’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Natus Medical $445.49 million 2.40 $48.00 million $0.57 57.72
Alliance HealthCare Services N/A N/A N/A ($0.17) -76.47

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

Insider and Institutional Ownership

92.7% of Natus Medical shares are owned by institutional investors. Comparatively, 27.0% of Alliance HealthCare Services shares are owned by institutional investors. 5.5% of Natus Medical shares are owned by company insiders. Comparatively, 54.8% of Alliance HealthCare Services 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.

Summary

Natus Medical beats Alliance HealthCare Services on 9 of the 10 factors compared between the two stocks.

Natus Medical Company Profile

Natus Medical Incorporated is a provider of newborn care and neurology healthcare products and services used for the screening, diagnosis, detection, treatment, monitoring and tracking of common medical ailments in newborn care, hearing impairment, neurological dysfunction, epilepsy, sleep disorders, neuromuscular diseases and balance and mobility disorders. The Company’s product offerings include computerized neurodiagnostic systems for audiology, neurology, polysomnography, and neonatology, as well as newborn care products, such as hearing screening systems, phototherapy devices for the treatment of newborn jaundice, head-cooling products for the treatment of brain injury in newborns, incubators to control the newborn’s environment, and software systems for managing and tracking disorders and diseases for public health laboratories. The Company is organized into three strategic business units: Neurology, Newborn Care and Otometrics.

Alliance HealthCare Services Company Profile

Alliance HealthCare Services, Inc. (Alliance) is a provider of outsourced healthcare services to hospitals and providers. The Company operates through three segments: Radiology Division, Oncology Division and Interventional Healthcare Services Division. The radiology segment comprises diagnostic imaging services, including magnetic resonance imaging (MRI), positron emission tomography/computed tomography (PET/CT) and other imaging services. The radiology segment also comprises radiation oncology services. The interventional healthcare services segment provides interventional healthcare through therapeutic minimally invasive pain management procedures medical management, laboratory testing and other services. The Company operates freestanding outpatient radiology, oncology and interventional clinics, and Ambulatory Surgical Centers (ASC) that are not owned by hospitals or providers. It operates over 560 diagnostic imaging and radiation therapy systems.

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