HCA Holdings (HCA) and Universal Health Services (UHS) Critical Survey
HCA Holdings (NYSE: HCA) and Universal Health Services (NYSE:UHS) are both large-cap medical companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.
Universal Health Services pays an annual dividend of $0.40 per share and has a dividend yield of 0.4%. HCA Holdings does not pay a dividend. Universal Health Services pays out 5.4% of its earnings in the form of a dividend.
This table compares HCA Holdings and Universal Health Services’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Universal Health Services||7.10%||15.49%||7.08%|
Volatility & Risk
HCA Holdings has a beta of 0.67, meaning that its stock price is 33% less volatile than the S&P 500. Comparatively, Universal Health Services has a beta of 1.07, meaning that its stock price is 7% more volatile than the S&P 500.
Institutional and Insider Ownership
73.8% of HCA Holdings shares are held by institutional investors. Comparatively, 85.3% of Universal Health Services shares are held by institutional investors. 2.9% of HCA Holdings shares are held by company insiders. Comparatively, 13.2% of Universal Health Services shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Earnings & Valuation
This table compares HCA Holdings and Universal Health Services’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|HCA Holdings||$42.27 billion||0.68||$8.20 billion||$7.47||10.68|
|Universal Health Services||$10.11 billion||1.06||$1.71 billion||$7.35||15.18|
HCA Holdings has higher revenue and earnings than Universal Health Services. HCA Holdings is trading at a lower price-to-earnings ratio than Universal Health Services, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent recommendations for HCA Holdings and Universal Health Services, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Universal Health Services||0||7||6||0||2.46|
HCA Holdings currently has a consensus target price of $92.60, suggesting a potential upside of 16.02%. Universal Health Services has a consensus target price of $134.30, suggesting a potential upside of 20.37%. Given Universal Health Services’ higher probable upside, analysts plainly believe Universal Health Services is more favorable than HCA Holdings.
Universal Health Services beats HCA Holdings on 9 of the 16 factors compared between the two stocks.
About HCA Holdings
HCA Healthcare, Inc., formerly HCA Holdings, Inc., is a holding company. The Company, through its subsidiaries, owns and operates hospitals and related healthcare entities. As of December 31, 2016, the Company operated in two geographically organized groups, including the National and American Groups. As of December 31, 2016, the National Group included 84 hospitals, which were located in Alaska, California, Florida, southern Georgia, Idaho, Indiana, northern Kentucky, Nevada, New Hampshire, South Carolina, Utah and Virginia. As of December 31, 2016, the American Group included 80 hospitals, which were located in Colorado, northern Georgia, Kansas, southern Kentucky, Louisiana, Mississippi, Missouri, Oklahoma, Tennessee and Texas. As of December 31, 2016, the Company operated six hospitals in England. The Company owns, manages or operates hospitals, freestanding surgery centers and freestanding emergency care facilities, walk-in clinics, diagnostic and imaging centers, among others.
About Universal Health Services
Universal Health Services, Inc. is a holding company. The Company’s principal business is owning and operating, through its subsidiaries, acute care hospitals and outpatient facilities, and behavioral healthcare facilities. The Company’s segments include Acute Care Hospital Services, Behavioral Health Services and Other. As of February 28, 2017, the Company owned and/or operated 319 inpatient facilities, and 33 outpatient and other facilities, located in 37 states, Washington, District of Columbia, the United Kingdom, Puerto Rico and the United States Virgin Islands. The Company’s hospitals provide a range of services, such as oncology, diagnostic care, coronary care, pediatric services, pharmacy services and/or behavioral health services. As of February 28, 2017, its acute care facilities located in the United States included 26 inpatient acute care hospitals; four free-standing emergency departments, and four outpatient surgery/cancer care centers and one surgical hospital.
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