Contrasting Air Methods (AIRM) & Kindred Healthcare (KND)

Air Methods (NASDAQ: AIRM) and Kindred Healthcare (NYSE:KND) are both healthcare companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, valuation, profitability, dividends and institutional ownership.

Dividends

Kindred Healthcare pays an annual dividend of $0.12 per share and has a dividend yield of 1.3%. Air Methods does not pay a dividend. Kindred Healthcare pays out -2.0% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Air Methods and Kindred Healthcare’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Air Methods N/A N/A N/A $2.59 N/A
Kindred Healthcare $7.22 billion 0.11 -$664.23 million ($6.02) -1.50

Air Methods has higher earnings, but lower revenue than Kindred Healthcare. Kindred Healthcare is trading at a lower price-to-earnings ratio than Air Methods, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings for Air Methods and Kindred Healthcare, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Air Methods 0 3 1 0 2.25
Kindred Healthcare 1 4 1 0 2.00

Air Methods currently has a consensus price target of $43.00, suggesting a potential upside of Infinity. Kindred Healthcare has a consensus price target of $8.83, suggesting a potential downside of 2.39%. Given Air Methods’ stronger consensus rating and higher possible upside, equities research analysts clearly believe Air Methods is more favorable than Kindred Healthcare.

Profitability

This table compares Air Methods and Kindred Healthcare’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Air Methods 6.67% 14.18% 4.43%
Kindred Healthcare -8.06% 2.29% 0.30%

Insider and Institutional Ownership

83.0% of Kindred Healthcare shares are owned by institutional investors. 9.0% of Air Methods shares are owned by insiders. Comparatively, 3.0% of Kindred Healthcare shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Summary

Air Methods beats Kindred Healthcare on 7 of the 12 factors compared between the two stocks.

Air Methods Company Profile

Air Methods Corporation is engaged in providing air medical emergency transport services and systems throughout the United States. The Company’s segments include Air Medical Services (AMS), Tourism and United Rotorcraft (UR) Division. As of December 31, 2016, its AMS Division provided air medical transportation services in 41 states to the general population as an independent service (also called community-based services) and to hospitals or other institutions under exclusive operating agreements (also called hospital-based services). It transports persons requiring intensive medical care from either the scene of an accident or general care hospitals to skilled trauma centers or tertiary care centers. As of December 31, 2016, its Air Medical Services Division operated 394 helicopters and 31 fixed wing aircrafts under both Instrument Flight Rules (IFR) and Visual Flight Rules (VFR). As of December 31, 2016, its Tourism Division operated 63 helicopters and two fixed wing aircrafts.

Kindred Healthcare Company Profile

Kindred Healthcare, Inc., incorporated on March 27, 1998, is a healthcare services company. The Company, through its subsidiaries, operates transitional care (TC) hospitals, a home health, hospice and community care business, inpatient rehabilitation hospitals (IRFs), a contract rehabilitation services business, nursing centers and assisted living facilities across the United States. The Company operates through divisions: the Kindred at Home division, the hospital division, the Kindred Rehabilitation Services division and the nursing center division. These divisions represent six segments: home health services, hospice services, hospitals, Kindred Hospital Rehabilitation Services, RehabCare and nursing centers. The home health services and hospice services operating segments are contained within the Kindred at Home division while the Kindred Hospital Rehabilitation Services and RehabCare operating segments are both contained within the Kindred Rehabilitation Services division.

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