Contrasting LifePoint Health (LPNT) and Universal Health Services (UHS)

LifePoint Health (NASDAQ: LPNT) and Universal Health Services (NYSE:UHS) are both mid-cap medical companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, analyst recommendations, earnings, institutional ownership and risk.

Institutional & Insider Ownership

99.5% of LifePoint Health shares are owned by institutional investors. Comparatively, 85.9% of Universal Health Services shares are owned by institutional investors. 8.8% of LifePoint Health shares are owned by insiders. Comparatively, 13.2% of Universal Health Services shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Universal Health Services pays an annual dividend of $0.40 per share and has a dividend yield of 0.4%. LifePoint Health does not pay a dividend. Universal Health Services pays out 5.4% of its earnings in the form of a dividend.

Volatility and Risk

LifePoint Health has a beta of 0.84, meaning that its stock price is 16% less volatile than the S&P 500. Comparatively, Universal Health Services has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for LifePoint Health and Universal Health Services, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LifePoint Health 2 10 3 0 2.07
Universal Health Services 0 8 8 0 2.50

LifePoint Health currently has a consensus target price of $64.92, suggesting a potential upside of 11.25%. Universal Health Services has a consensus target price of $132.31, suggesting a potential upside of 17.24%. Given Universal Health Services’ stronger consensus rating and higher probable upside, analysts plainly believe Universal Health Services is more favorable than LifePoint Health.

Profitability

This table compares LifePoint Health and Universal Health Services’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LifePoint Health 2.61% 7.40% 2.66%
Universal Health Services 7.10% 15.49% 7.08%

Valuation and Earnings

This table compares LifePoint Health and Universal Health Services’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
LifePoint Health $6.42 billion 0.36 $760.40 million $4.48 13.02
Universal Health Services $10.11 billion 1.07 $1.71 billion $7.35 15.35

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

Summary

Universal Health Services beats LifePoint Health on 14 of the 16 factors compared between the two stocks.

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.

Universal Health Services Company Profile

Universal Health Services, Inc. is a holding company. The Company’s principal business is owning and operating, through its subsidiaries, acute care hospitals and outpatient facilities, and behavioral healthcare facilities. The Company’s segments include Acute Care Hospital Services, Behavioral Health Services and Other. As of February 28, 2017, the Company owned and/or operated 319 inpatient facilities, and 33 outpatient and other facilities, located in 37 states, Washington, District of Columbia, the United Kingdom, Puerto Rico and the United States Virgin Islands. The Company’s hospitals provide a range of services, such as oncology, diagnostic care, coronary care, pediatric services, pharmacy services and/or behavioral health services. As of February 28, 2017, its acute care facilities located in the United States included 26 inpatient acute care hospitals; four free-standing emergency departments, and four outpatient surgery/cancer care centers and one surgical hospital.

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