AMERIGROUP (NYSE: AGP) and Quorum Health (NYSE:QHC) are both healthcare companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, institutional ownership, dividends and profitability.

Valuation & Earnings

This table compares AMERIGROUP and Quorum Health’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AMERIGROUP N/A N/A N/A $2.56 35.82
Quorum Health $2.42 billion 0.06 -$347.68 million ($6.30) -0.75

AMERIGROUP has higher earnings, but lower revenue than Quorum Health. Quorum Health is trading at a lower price-to-earnings ratio than AMERIGROUP, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

81.8% of Quorum Health shares are held by institutional investors. 4.7% of Quorum Health shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations for AMERIGROUP and Quorum Health, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AMERIGROUP 0 0 0 0 N/A
Quorum Health 1 3 0 0 1.75

Quorum Health has a consensus target price of $3.88, suggesting a potential downside of 18.08%. Given Quorum Health’s higher probable upside, analysts clearly believe Quorum Health is more favorable than AMERIGROUP.

Risk and Volatility

AMERIGROUP has a beta of 1.08, indicating that its share price is 8% more volatile than the S&P 500. Comparatively, Quorum Health has a beta of 7.53, indicating that its share price is 653% more volatile than the S&P 500.

Profitability

This table compares AMERIGROUP and Quorum Health’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AMERIGROUP N/A N/A N/A
Quorum Health -8.28% -38.34% -3.34%

Summary

Quorum Health beats AMERIGROUP on 5 of the 9 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.

Quorum Health Company Profile

Quorum Health Corporation is an operator and manager of general acute care hospitals and outpatient services in the United States. The Company operates in two segments: Hospital operations, which includes its general acute care hospitals and related healthcare entities that provide inpatient and outpatient healthcare services, and hospital management advisory and consulting services, which includes Quorum Health Resources, LLC (QHR). It operates QHR, which is a hospital management advisory and consulting services that provides services to non-affiliated general acute care hospitals. Its hospitals and its affiliated businesses offer services, such as general acute care, emergency room, general and specialty surgery and rehabilitation services.

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