HMS Holdings Corp (NASDAQ: HMSY) and The Joint Corp. (NASDAQ:JYNT) are both small-cap medical companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, risk, dividends, earnings, institutional ownership, analyst recommendations and valuation.

Insider & Institutional Ownership

93.0% of HMS Holdings Corp shares are held by institutional investors. Comparatively, 47.0% of The Joint Corp. shares are held by institutional investors. 3.2% of HMS Holdings Corp shares are held by insiders. Comparatively, 6.1% of The Joint Corp. shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current recommendations and price targets for HMS Holdings Corp and The Joint Corp., as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HMS Holdings Corp 0 2 5 1 2.88
The Joint Corp. 0 0 4 0 3.00

HMS Holdings Corp currently has a consensus target price of $23.06, suggesting a potential upside of 19.12%. The Joint Corp. has a consensus target price of $6.15, suggesting a potential upside of 32.26%. Given The Joint Corp.’s stronger consensus rating and higher possible upside, analysts plainly believe The Joint Corp. is more favorable than HMS Holdings Corp.

Earnings and Valuation

This table compares HMS Holdings Corp and The Joint Corp.’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
HMS Holdings Corp $495.50 million 3.28 $92.81 million $0.38 50.95
The Joint Corp. $22.97 million 2.67 -$4.53 million ($0.87) -5.34

HMS Holdings Corp has higher revenue and earnings than The Joint Corp.. The Joint Corp. is trading at a lower price-to-earnings ratio than HMS Holdings Corp, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares HMS Holdings Corp and The Joint Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
HMS Holdings Corp 6.37% 9.26% 5.81%
The Joint Corp. -48.08% -103.25% -42.06%

Volatility & Risk

HMS Holdings Corp has a beta of 1.14, indicating that its stock price is 14% more volatile than the S&P 500. Comparatively, The Joint Corp. has a beta of 1.47, indicating that its stock price is 47% more volatile than the S&P 500.

Summary

HMS Holdings Corp beats The Joint Corp. on 10 of the 14 factors compared between the two stocks.

About HMS Holdings Corp

HMS Holdings Corp. is a holding company. The Company, through its subsidiaries, operates in the United States healthcare insurance benefit cost containment marketplace. It provides coordination of benefits services to government, and private healthcare payers and sponsors. Its payment integrity services ensure that healthcare claims billed are accurate and appropriate. It offers services to state Medicaid agencies, government health agencies and health plans, including Medicaid managed care, Medicare Advantage and group and individual health lines of business; government and private employers; and other healthcare payers and sponsors, including child support agencies. It serves approximately 45 state Medicaid programs and the District of Columbia, and government health agencies, including Centers for Medicare & Medicaid Services (CMS) and the Veterans Health Administration (VHA). It also provides services to approximately 250 health plans and supports their multiple lines of business.

About The Joint Corp.

The Joint Corp. develops, owns, operates, supports and manages chiropractic clinics through direct ownership, management arrangements, franchising and the sale of regional developer rights throughout the United States. The Company is franchisor and operator of chiropractic clinics. The Company offers its patients the opportunity to visit its clinics without an appointment and receive prompt attention. The Company has approximately 310 franchised, company-owned, or managed clinics in operation in over 30 states. In addition to its approximately 310 operating clinics, the Company has granted franchises either directly or through its regional developers for an additional over 170 clinics. The Company offers a range of membership and wellness packages. Each patient’s records are digitally updated for ready retrieval in its data storage system by its chiropractors in compliance with various applicable medical records security and privacy regulations.

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