LifePoint Health (LPNT) versus Chemed Corp. (CHE) Critical Review
LifePoint Health (NASDAQ: LPNT) and Chemed Corp. (NYSE:CHE) are both mid-cap medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.
Volatility & Risk
LifePoint Health has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500. Comparatively, Chemed Corp. has a beta of 1.14, suggesting that its share price is 14% more volatile than the S&P 500.
This is a breakdown of recent ratings and target prices for LifePoint Health and Chemed Corp., as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
LifePoint Health currently has a consensus target price of $65.50, indicating a potential upside of 14.51%. Chemed Corp. has a consensus target price of $214.50, indicating a potential upside of 10.96%. Given LifePoint Health’s higher probable upside, analysts clearly believe LifePoint Health is more favorable than Chemed Corp..
Chemed Corp. pays an annual dividend of $1.12 per share and has a dividend yield of 0.6%. LifePoint Health does not pay a dividend. Chemed Corp. pays out 28.1% of its earnings in the form of a dividend. Chemed Corp. has increased its dividend for 8 consecutive years.
Insider and Institutional Ownership
99.5% of LifePoint Health shares are owned by institutional investors. Comparatively, 97.0% of Chemed Corp. shares are owned by institutional investors. 7.3% of LifePoint Health shares are owned by company insiders. Comparatively, 5.3% of Chemed Corp. shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Valuation and Earnings
This table compares LifePoint Health and Chemed Corp.’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|LifePoint Health||$6.42 billion||0.36||$760.40 million||$4.48||12.77|
|Chemed Corp.||$1.62 billion||1.91||$226.52 million||$3.99||48.45|
LifePoint Health has higher revenue and earnings than Chemed Corp.. LifePoint Health is trading at a lower price-to-earnings ratio than Chemed Corp., indicating that it is currently the more affordable of the two stocks.
This table compares LifePoint Health and Chemed Corp.’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Chemed Corp. beats LifePoint Health on 9 of the 17 factors compared between the two stocks.
LifePoint Health Company Profile
LifePoint Health, Inc., through its subsidiaries, owns and operates community hospitals, regional health systems, physician practices, outpatient centers and post-acute facilities. As of December 31, 2016, the Company operated 72 hospital campuses in 22 states, having a total of 9,424 licensed beds. It offers a range of general and specialized healthcare services to patients through a network of hospitals and outpatient facilities. Its services include general surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic care, coronary care, rehabilitation services and pediatric services, and in some of its hospitals, the Company offers specialized services, such as open-heart surgery, skilled nursing, psychiatric care and neuro-surgery. It provides outpatient services, such as same-day surgery, laboratory, x-ray, respiratory therapy, imaging, sports medicine and lithotripsy.
Chemed Corp. Company Profile
Chemed Corporation purchases, operates and divests subsidiaries engaged in various business activities. The Company operates through two segments: the VITAS segment (VITAS) and the Roto-Rooter segment (Roto-Rooter). The Company’s VITAS provides hospice and palliative care services to its patients through a network of physicians, registered nurses, home health aides, social workers, clergy and volunteers. VITAS is the provider of hospice services in an industry dominated primarily by small, non-profit, community-based hospices. VITAS provides hospice care to Medicare beneficiaries participating in these managed care programs. A portion of its VITAS business is operated in the state of Florida. The Roto-Rooter segment provides plumbing, drain cleaning, water restoration and other related services to both residential and commercial customers.
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