U.S. Physical Therapy (NYSE: USPH) and Premier (NASDAQ:PINC) are both medical companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, earnings, valuation, risk and analyst recommendations.

Dividends

U.S. Physical Therapy pays an annual dividend of $0.80 per share and has a dividend yield of 1.3%. Premier does not pay a dividend. U.S. Physical Therapy pays out 46.8% of its earnings in the form of a dividend. Premier has increased its dividend for 6 consecutive years.

Profitability

This table compares U.S. Physical Therapy and Premier’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
U.S. Physical Therapy 5.65% 12.91% 7.01%
Premier 0.66% -16.27% 10.59%

Analyst Recommendations

This is a breakdown of current ratings and target prices for U.S. Physical Therapy and Premier, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
U.S. Physical Therapy 0 2 3 0 2.60
Premier 1 1 8 0 2.70

U.S. Physical Therapy currently has a consensus target price of $69.75, indicating a potential upside of 11.69%. Premier has a consensus target price of $40.00, indicating a potential upside of 18.13%. Given Premier’s stronger consensus rating and higher possible upside, analysts plainly believe Premier is more favorable than U.S. Physical Therapy.

Insider & Institutional Ownership

94.9% of U.S. Physical Therapy shares are owned by institutional investors. Comparatively, 37.8% of Premier shares are owned by institutional investors. 3.1% of U.S. Physical Therapy shares are owned by insiders. Comparatively, 17.1% of Premier shares are owned by 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 and Valuation

This table compares U.S. Physical Therapy and Premier’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
U.S. Physical Therapy $377.24 million 2.08 $60.41 million $1.71 36.52
Premier $1.45 billion 1.24 $440.72 million ($6.33) -5.35

Premier has higher revenue and earnings than U.S. Physical Therapy. Premier is trading at a lower price-to-earnings ratio than U.S. Physical Therapy, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

U.S. Physical Therapy has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500. Comparatively, Premier has a beta of 0.46, meaning that its stock price is 54% less volatile than the S&P 500.

Summary

Premier beats U.S. Physical Therapy on 9 of the 17 factors compared between the two stocks.

About U.S. Physical Therapy

U.S. Physical Therapy, Inc., through its subsidiaries, operates outpatient physical therapy clinics that provide pre-and post-operative care, and treatment for orthopedic-related disorders, sports-related injuries, preventative care, rehabilitation of injured workers and neurological-related injuries. The Company’s segment is made up of various clinics within partnerships. The Company primarily operates through subsidiary clinic partnerships, in which it owns a general partnership interest and a limited partnership interest, and the managing therapists of the clinics owns the remaining limited partnership interest in the clinics. The Company operates 562 physical therapy clinics in 42 states. There are approximately 380 clinics operated under Clinic Partnerships and over 100 operated as Company-owned Facilities. In addition to its owned clinics, it also manages physical therapy facilities for third parties, primarily physicians, with over 29 third-party facilities under management.

About Premier

Premier, Inc. is a healthcare improvement company. The Company is uniting an alliance of approximately 3,750 United States hospitals and more than 130,000 other provider organizations to transform healthcare. The Company operates healthcare group purchasing organizations and also provides integrated data and analytics, supply chain solutions, advisory services, performance improvement collaborative and other services. The Company plays a role in the healthcare industry, collaborating with members to co-develop long-term innovations that reinvent and improve the way care is delivered to patients nationwide.

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