The Ensign Group (NASDAQ: ENSG) and Tivity Health (NASDAQ:TVTY) are both small-cap medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, dividends, risk, profitability and earnings.

Dividends

The Ensign Group pays an annual dividend of $0.17 per share and has a dividend yield of 0.7%. Tivity Health does not pay a dividend. The Ensign Group pays out 20.2% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares The Ensign Group and Tivity Health’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
The Ensign Group $1.75 billion 0.68 $121.76 million $0.84 27.86
Tivity Health $529.87 million 3.13 $115.05 million $2.32 18.17

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

Volatility and Risk

The Ensign Group has a beta of 0.86, suggesting that its stock price is 14% less volatile than the S&P 500. Comparatively, Tivity Health has a beta of 0.38, suggesting that its stock price is 62% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for The Ensign Group and Tivity Health, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Ensign Group 2 0 3 0 2.20
Tivity Health 0 1 5 0 2.83

The Ensign Group presently has a consensus price target of $22.00, indicating a potential downside of 5.98%. Tivity Health has a consensus price target of $41.33, indicating a potential downside of 1.94%. Given Tivity Health’s stronger consensus rating and higher probable upside, analysts clearly believe Tivity Health is more favorable than The Ensign Group.

Profitability

This table compares The Ensign Group and Tivity Health’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Ensign Group 2.54% 13.01% 6.14%
Tivity Health 12.41% 30.87% 11.06%

Insider and Institutional Ownership

84.2% of The Ensign Group shares are owned by institutional investors. 6.2% of The Ensign Group shares are owned by insiders. Comparatively, 8.4% of Tivity Health shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Tivity Health beats The Ensign Group on 11 of the 16 factors compared between the two stocks.

The Ensign Group Company Profile

The Ensign Group, Inc., through its operating subsidiaries, provides healthcare services across the post-acute care continuum, as well as other ancillary businesses located in Arizona, California, Colorado, Idaho, Iowa, Kansas, Nebraska, Nevada, Oregon, South Carolina, Texas, Utah, Washington and Wisconsin. The Company’s subsidiaries provide skilled nursing, assisted living, home health and hospice, and other ancillary services. Its segments include transitional and skilled services segment, which includes the operation of skilled nursing facilities; assisted and independent living services segment, which includes the operation of assisted and independent living facilities; home health and hospice services segment, which includes its home health, home care and hospice businesses, and all other segment, which includes mobile diagnostics and other ancillary operations. As of July10, 2017, it operated in 226 healthcare facilities.

Tivity Health Company Profile

Tivity Health, Inc., formerly Healthways, Inc., is focused targeted population health for those aged 50 and older. The Company offers three programs: SilverSneakers senior fitness, Prime fitness and WholeHealth Living. The SilverSneakers senior fitness program is offered to members of Medicare Advantage, Medicare Supplement, and Group Retiree plans. The Company also offers Prime fitness, a fitness facility access program, through commercial health plans, employers and insurance exchanges. Its national network of fitness centers delivers both SilverSneakers and Prime fitness. As of December 31, 2016, the Company’s fitness networks encompassed approximately 16,000 participating locations and more than 1,000 alternative locations that provide classes outside of traditional fitness centers. As of December 31, 2016, the Company’s WholeHealth Living network included over 88,000 complementary, alternative, and physical medicine practitioners to serve individuals through health plans.

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