Surgical Care Affiliates (SCAI) versus Universal Health Services (UHS) Financial Review
Surgical Care Affiliates (NASDAQ: SCAI) and Universal Health Services (NYSE:UHS) are both healthcare facilities & services – nec companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, profitability, risk, earnings, institutional ownership, analyst recommendations and dividends.
Universal Health Services pays an annual dividend of $0.40 per share and has a dividend yield of 0.4%. Surgical Care Affiliates does not pay a dividend. Universal Health Services pays out 5.5% of its earnings in the form of a dividend.
Insider and Institutional Ownership
85.7% of Universal Health Services shares are owned by institutional investors. 3.3% of Surgical Care Affiliates shares are owned by company insiders. Comparatively, 13.2% of Universal Health Services shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.
This table compares Surgical Care Affiliates and Universal Health Services’ 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%|
|Universal Health Services||6.90%||15.13%||6.92%|
This is a summary of recent ratings and target prices for Surgical Care Affiliates and Universal Health Services, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Surgical Care Affiliates||0||2||0||0||2.00|
|Universal Health Services||0||7||10||0||2.59|
Surgical Care Affiliates presently has a consensus price target of $50.00, indicating a potential upside of Infinity. Universal Health Services has a consensus price target of $127.71, indicating a potential upside of 25.69%. Given Surgical Care Affiliates’ higher possible upside, analysts clearly believe Surgical Care Affiliates is more favorable than Universal Health Services.
Earnings and Valuation
This table compares Surgical Care Affiliates and Universal Health Services’ revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Surgical Care Affiliates||N/A||N/A||N/A||$0.86||N/A|
|Universal Health Services||$9.77 billion||1.00||$702.40 million||$7.28||13.96|
Universal Health Services has higher revenue and earnings than Surgical Care Affiliates. Surgical Care Affiliates is trading at a lower price-to-earnings ratio than Universal Health Services, indicating that it is currently the more affordable of the two stocks.
Universal Health Services beats Surgical Care Affiliates on 8 of the 12 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 Universal Health Services
Universal Health Services, Inc. is a holding company. The Company’s principal business is owning and operating, through its subsidiaries, acute care hospitals and outpatient facilities, and behavioral healthcare facilities. The Company’s segments include Acute Care Hospital Services, Behavioral Health Services and Other. As of February 28, 2017, the Company owned and/or operated 319 inpatient facilities, and 33 outpatient and other facilities, located in 37 states, Washington, District of Columbia, the United Kingdom, Puerto Rico and the United States Virgin Islands. The Company’s hospitals provide a range of services, such as oncology, diagnostic care, coronary care, pediatric services, pharmacy services and/or behavioral health services. As of February 28, 2017, its acute care facilities located in the United States included 26 inpatient acute care hospitals; four free-standing emergency departments, and four outpatient surgery/cancer care centers and one surgical hospital.
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