Surgical Care Affiliates (NASDAQ: SCAI) and Streamline Health Solutions (NASDAQ:STRM) are both healthcare companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, dividends, earnings, risk, analyst recommendations, valuation and profitability.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Surgical Care Affiliates and Streamline Health Solutions, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Surgical Care Affiliates 0 2 0 0 2.00
Streamline Health Solutions 0 0 0 0 N/A

Surgical Care Affiliates currently has a consensus target price of $50.00, suggesting a potential downside of 10.51%. Given Surgical Care Affiliates’ higher probable upside, equities analysts clearly believe Surgical Care Affiliates is more favorable than Streamline Health Solutions.

Earnings & Valuation

This table compares Surgical Care Affiliates and Streamline Health Solutions’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Surgical Care Affiliates N/A N/A N/A $0.55 101.58
Streamline Health Solutions $24.86 million 1.39 -$3.83 million ($0.31) -5.61

Surgical Care Affiliates has higher revenue, but lower earnings than Streamline Health Solutions. Streamline Health Solutions is trading at a lower price-to-earnings ratio than Surgical Care Affiliates, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Surgical Care Affiliates and Streamline Health Solutions’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Surgical Care Affiliates 21.52% 13.07% 12.83%
Streamline Health Solutions -24.50% -56.04% -15.49%

Volatility & Risk

Surgical Care Affiliates has a beta of 0.58, meaning that its stock price is 42% less volatile than the S&P 500. Comparatively, Streamline Health Solutions has a beta of 0.1, meaning that its stock price is 90% less volatile than the S&P 500.

Institutional and Insider Ownership

37.9% of Streamline Health Solutions shares are owned by institutional investors. 3.3% of Surgical Care Affiliates shares are owned by insiders. Comparatively, 26.1% of Streamline Health Solutions shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

Surgical Care Affiliates beats Streamline Health Solutions on 6 of the 9 factors compared between the two stocks.

About Surgical Care Affiliates

Surgical Care Affiliates, Inc. is a provider of solutions to physicians, health plans and health systems to optimize surgical care. The Company offers tools and systems in the areas of clinical benchmarking, clinical best practices, operating efficiency, care coordination and supply chain management. As of December 31, 2016, the Company operated a network of surgical facilities in the United States, which included 197 ambulatory surgery centers (ASCs) and seven surgical hospitals in partnership with approximately 3,000 physician partners. The Company’s operations consist of its ownership and management of ASCs and surgical hospitals. Its ASCs provide the facilities, equipment, supplies and clinical support staff necessary to provide non-emergency surgical services to patients not requiring hospitalization. Its surgical hospitals allow physicians to perform a range of surgical procedures, including surgeries, and allow patients to stay in the hospital for several nights to recover.

About Streamline Health Solutions

Streamline Health Solutions, Inc. is engaged in providing healthcare information technology through the licensing of its Electronic Health Information Management, Patient Financial, Coding and Clinical Documentation Improvement (CDI), and other Workflow software applications, and the use of such applications by software as a service. The Company also provides implementation and consulting services to complement its software solutions. The Company provides computer software-based solutions through its Looking Glass platform. The Company sells its solutions and services in North America to hospitals and health systems, including physician practices, through its direct sales force and its reseller partnerships. The Company’s software and services allow hospitals and integrated healthcare delivery systems in the United States and Canada to capture, store, manage, route, retrieve and process patient clinical, financial and other healthcare provider information.

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