Genesis Healthcare (NYSE: GEN) and Five Star Senior Living (NASDAQ:FVE) are both small-cap medical companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, analyst recommendations, valuation, profitability, institutional ownership, risk and earnings.
Insider & Institutional Ownership
18.7% of Genesis Healthcare shares are held by institutional investors. Comparatively, 21.3% of Five Star Senior Living shares are held by institutional investors. 57.6% of Genesis Healthcare shares are held by insiders. Comparatively, 39.8% of Five Star Senior Living shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.
This table compares Genesis Healthcare and Five Star Senior Living’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Five Star Senior Living||-1.83%||-18.10%||-5.59%|
Risk and Volatility
Genesis Healthcare has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500. Comparatively, Five Star Senior Living has a beta of 1.01, meaning that its share price is 1% more volatile than the S&P 500.
This is a breakdown of current ratings for Genesis Healthcare and Five Star Senior Living, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Five Star Senior Living||0||0||2||0||3.00|
Genesis Healthcare presently has a consensus target price of $2.00, indicating a potential upside of 173.97%. Five Star Senior Living has a consensus target price of $3.88, indicating a potential upside of 150.00%. Given Genesis Healthcare’s higher probable upside, equities analysts clearly believe Genesis Healthcare is more favorable than Five Star Senior Living.
Valuation and Earnings
This table compares Genesis Healthcare and Five Star Senior Living’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Genesis Healthcare||$5.73 billion||0.02||-$64.01 million||($4.95)||-0.15|
|Five Star Senior Living||$1.38 billion||0.06||-$21.81 million||($0.51)||-3.04|
Five Star Senior Living has lower revenue, but higher earnings than Genesis Healthcare. Five Star Senior Living is trading at a lower price-to-earnings ratio than Genesis Healthcare, indicating that it is currently the more affordable of the two stocks.
Five Star Senior Living beats Genesis Healthcare on 7 of the 13 factors compared between the two stocks.
Genesis Healthcare Company Profile
Genesis Healthcare, Inc. is a holding company that provides post-acute care. The Company operates through three segments: inpatient services, which includes the operation of skilled nursing facilities and assisted or senior living facilities; rehabilitation therapy services, which includes its integrated and third-party rehabilitation and respiratory therapy services, and all other services. As of December 31, 2016, the Company offered inpatient services through its network of 499 skilled nursing and assisted/senior living facilities across 34 states, consisting of 473 skilled nursing facilities and 26 stand-alone assisted/senior living facilities. Its services focus primarily on the medical and physical issues facing elderly patients and are provided by its skilled nursing companies, assisted or senior living communities, integrated and third-party rehabilitation therapy business, and other ancillary services.
Five Star Senior Living Company Profile
Five Star Senior Living Inc., formerly Five Star Quality Care, Inc., operates senior living communities, including independent living communities, assisted living communities and skilled nursing facilities (SNFs). The Company’s segments include senior living communities and rehabilitation and wellness. In the senior living communities segment, the Company operates for its own account or manage for the account of others independent living communities, assisted living communities and SNFs that are subject to centralized oversight and provide housing and services to elderly residents. In the rehabilitation and wellness segment, the Company provides services in the inpatient setting and in outpatient clinics. As of December 31, 2016, the Company operated 283 senior living communities located in 32 states with 31,830 living units, including 253 primarily independent and assisted living communities with 29,229 living units and 30 SNFs with 2,601 living units.
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