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

Insider and Institutional Ownership

84.2% of The Ensign Group shares are owned by institutional investors. 8.4% of Healthways shares are owned by company insiders. Comparatively, 6.2% of The Ensign Group shares are owned by company 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.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Healthways and The Ensign Group, as provided by MarketBeat.

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

Healthways presently has a consensus target price of $43.17, suggesting a potential upside of 6.06%. The Ensign Group has a consensus target price of $22.00, suggesting a potential upside of 2.14%. Given Healthways’ stronger consensus rating and higher probable upside, equities analysts clearly believe Healthways is more favorable than The Ensign Group.

Risk and Volatility

Healthways has a beta of 0.38, indicating that its share price is 62% less volatile than the S&P 500. Comparatively, The Ensign Group has a beta of 0.87, indicating that its share price is 13% less volatile than the S&P 500.

Dividends

The Ensign Group pays an annual dividend of $0.17 per share and has a dividend yield of 0.8%. Healthways 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 Healthways and The Ensign Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Healthways $529.87 million 3.03 $115.05 million $2.32 17.54
The Ensign Group $1.75 billion 0.63 $121.76 million $0.84 25.64

The Ensign Group has higher revenue and earnings than Healthways. Healthways 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.

Profitability

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

Net Margins Return on Equity Return on Assets
Healthways 17.30% 29.81% 10.02%
The Ensign Group 2.54% 13.01% 6.14%

Summary

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

Healthways 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.

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.

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