Critical Analysis: Five Star Senior Living (FVE) versus Omnicare (OCR)
Five Star Senior Living (NASDAQ: FVE) and Omnicare (NYSE:OCR) are both residential & long term care companies, but which is the better stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, dividends, valuation, risk, profitability and institutional ownership.
Institutional and Insider Ownership
21.3% of Five Star Senior Living shares are held by institutional investors. 39.8% of Five Star Senior Living shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.
This table compares Five Star Senior Living and Omnicare’s revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Five Star Senior Living||$1.38 billion||0.05||-$21.81 million||($0.53)||-2.83|
Omnicare has lower revenue, but higher earnings than Five Star Senior Living. Five Star Senior Living is trading at a lower price-to-earnings ratio than Omnicare, indicating that it is currently the more affordable of the two stocks.
This table compares Five Star Senior Living and Omnicare’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%|
This is a summary of recent ratings and target prices for Five Star Senior Living and Omnicare, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Five Star Senior Living||0||0||2||0||3.00|
Five Star Senior Living currently has a consensus target price of $3.88, suggesting a potential upside of 158.33%. Given Five Star Senior Living’s higher possible upside, equities research analysts plainly believe Five Star Senior Living is more favorable than Omnicare.
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.
Omnicare Company Profile
Omnicare, Inc. is a healthcare services company that specializes in the management of complex pharmaceutical care. The Company operates two primary businesses, Long-Term Care Group (LTC) and Specialty Care Group (SCG), each serving different customer populations. Through LTC, the Company is a provider of pharmaceuticals and related pharmacy and ancillary services to long-term care facilities, as well as chronic care facilities and other settings. As of December 31, 2014, LTC provided pharmacy services in the United States in 47 states and the District of Columbia. The Specialty Care Group (SCG) operates across a spectrum of the healthcare continuum, serving the needs of biopharmaceutical manufacturers, physicians, nurses, caregivers and patients. Its SCG services are primarily focused on the specialty pharmaceutical market and incorporate four platforms: brand support services, supply chain solutions, patient support services and specialty pharmacy.
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