Contrasting AMERIGROUP (AGP) & AAC (AAC)
AMERIGROUP (NYSE: AGP) and AAC (NYSE:AAC) are both healthcare companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, risk, earnings, valuation and institutional ownership.
Volatility and Risk
AMERIGROUP has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500. Comparatively, AAC has a beta of 1.95, meaning that its stock price is 95% more volatile than the S&P 500.
This table compares AMERIGROUP and AAC’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Valuation & Earnings
This table compares AMERIGROUP and AAC’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
AMERIGROUP has higher earnings, but lower revenue than AAC. AAC is trading at a lower price-to-earnings ratio than AMERIGROUP, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings for AMERIGROUP and AAC, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
AAC has a consensus price target of $10.00, suggesting a potential upside of 11.48%. Given AAC’s higher possible upside, analysts clearly believe AAC is more favorable than AMERIGROUP.
Insider and Institutional Ownership
42.5% of AAC shares are owned by institutional investors. 37.3% of AAC shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
AAC beats AMERIGROUP on 8 of the 10 factors compared between the two stocks.
AMERIGROUP Company Profile
AMERIGROUP Corporation is a multi-state managed healthcare company focused on serving people who receive healthcare benefits through publicly funded healthcare programs, including Medicaid, Children’s Health Insurance Program (CHIP), Medicaid expansion programs and Medicare Advantage. The Company offers a continuum of care management, including disease management, pharmacy integration, centralized telephonic case management, in-person case management within healthcare facilities, and home visit case management for some of its members. As of December 31, 2011, the Company provided a number of healthcare products to approximately 2,024,000 members. Effective February 1, 2012, it provides managed care services in Louisiana. On May 1, 2012, it acquired Health Plus. In November 2012, the Company sold its Virginia health plan to Inova Health System Foundation. In December 2012, WellPoint Inc acquired the Company.
AAC Company Profile
AAC Holdings, Inc. is a provider of inpatient and outpatient substance abuse treatment services for individuals with drug and alcohol addiction. The Company performs drug testing and diagnostics laboratory services and provides physician services to its clients. As of June 30, 2016, the Company operated 12 residential substance abuse treatment facilities located throughout the United States, focused on delivering clinical care and treatment solutions across 1,139 beds, which includes 636 licensed detoxification beds, and 18 standalone outpatient centers. In addition, the Company focuses on expanding The Oxford Centre facility. As of June 30, 2016, the Company’s capacity at its Forterus treatment facility was 14 beds. The Company is engaged in deploying research-based treatment programs with structured curricula for detoxification, residential treatment, partial hospitalization and intensive outpatient care. The Company is also an Internet marketer in the addiction treatment industry.
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