Analyzing MEDNAX (MD) and LifePoint Health (LPNT)

MEDNAX (NYSE: MD) and LifePoint Health (NASDAQ:LPNT) are both medical companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, institutional ownership, risk, dividends, analyst recommendations, earnings and valuation.

Insider and Institutional Ownership

95.2% of MEDNAX shares are held by institutional investors. 2.4% of MEDNAX shares are held by insiders. Comparatively, 8.8% of LifePoint Health shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares MEDNAX and LifePoint Health’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
MEDNAX $3.46 billion 1.46 $320.37 million $3.45 15.62
LifePoint Health $7.27 billion 0.26 $121.90 million $4.23 11.24

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

Analyst Recommendations

This is a breakdown of current ratings and target prices for MEDNAX and LifePoint Health, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MEDNAX 1 8 3 0 2.17
LifePoint Health 1 12 5 0 2.22

MEDNAX currently has a consensus target price of $54.45, indicating a potential upside of 2.01%. LifePoint Health has a consensus target price of $57.64, indicating a potential upside of 21.23%. Given LifePoint Health’s stronger consensus rating and higher possible upside, analysts plainly believe LifePoint Health is more favorable than MEDNAX.

Risk and Volatility

MEDNAX has a beta of 0.31, meaning that its share price is 69% less volatile than the S&P 500. Comparatively, LifePoint Health has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500.

Profitability

This table compares MEDNAX and LifePoint Health’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MEDNAX 9.26% 10.10% 5.23%
LifePoint Health 2.45% 7.01% 2.53%

MEDNAX Company Profile

MEDNAX, Inc. is a provider of physician services, including newborn, anesthesia, maternal-fetal, teleradiology, pediatric cardiology and other pediatric subspecialty care. As of December 31, 2016, the Company’s national network consisted of over 3,600 affiliated physicians, including over 1,130 physicians providing neonatal clinical care, in 35 states and Puerto Rico, primarily within hospital-based neonatal intensive care units (NICUs), to babies born prematurely or with medical complications. As of December 31, 2016, the Company had over 1,390 affiliated physicians providing anesthesia care to patients in connection with surgical and other procedures, as well as pain management. As of December 31, 2016, the Company had 270 affiliated physicians providing maternal-fetal and obstetrical medical care to expectant mothers experiencing complicated pregnancies primarily in areas where its affiliated neonatal physicians practice.

LifePoint Health Company Profile

LifePoint Health, Inc., through its subsidiaries, owns and operates community hospitals, regional health systems, physician practices, outpatient centers and post-acute facilities. As of December 31, 2016, the Company operated 72 hospital campuses in 22 states, having a total of 9,424 licensed beds. It offers a range of general and specialized healthcare services to patients through a network of hospitals and outpatient facilities. Its services include general surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic care, coronary care, rehabilitation services and pediatric services, and in some of its hospitals, the Company offers specialized services, such as open-heart surgery, skilled nursing, psychiatric care and neuro-surgery. It provides outpatient services, such as same-day surgery, laboratory, x-ray, respiratory therapy, imaging, sports medicine and lithotripsy.

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