Comparing Quorum Health Corporation (QHC) and Premier (PINC)

Quorum Health Corporation (NYSE: QHC) and Premier (NASDAQ:PINC) are both small-cap medical companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, risk, earnings, valuation, institutional ownership and dividends.

Risk & Volatility

Quorum Health Corporation has a beta of 8.31, suggesting that its share price is 731% more volatile than the S&P 500. Comparatively, Premier has a beta of 0.47, suggesting that its share price is 53% less volatile than the S&P 500.

Profitability

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

Net Margins Return on Equity Return on Assets
Quorum Health Corporation -6.88% -26.69% -2.79%
Premier 0.66% -16.27% 10.59%

Insider and Institutional Ownership

81.4% of Quorum Health Corporation shares are owned by institutional investors. Comparatively, 98.9% of Premier shares are owned by institutional investors. 4.7% of Quorum Health Corporation shares are owned by insiders. Comparatively, 17.1% of Premier shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Quorum Health Corporation $2.12 billion 0.07 $90.00 million ($5.51) -0.85
Premier $1.45 billion 1.20 $440.72 million ($6.33) -5.15

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

Analyst Recommendations

This is a summary of current recommendations and price targets for Quorum Health Corporation and Premier, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Quorum Health Corporation 1 3 0 0 1.75
Premier 1 1 7 0 2.67

Quorum Health Corporation currently has a consensus price target of $4.13, indicating a potential downside of 11.48%. Premier has a consensus price target of $39.60, indicating a potential upside of 21.51%. Given Premier’s stronger consensus rating and higher possible upside, analysts clearly believe Premier is more favorable than Quorum Health Corporation.

Summary

Premier beats Quorum Health Corporation on 10 of the 13 factors compared between the two stocks.

Quorum Health Corporation 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. On April 1, 2016, Community Health Systems, Inc. announced that its board of directors has approved the distribution to its stockholders of 100% of the common stock of a new, independent publicly traded company, Quorum Health Corporation.

Premier Company Profile

Premier, Inc. is a healthcare improvement company. The Company is uniting an alliance of approximately 3,750 United States hospitals and more than 130,000 other provider organizations to transform healthcare. The Company operates healthcare group purchasing organizations and also provides integrated data and analytics, supply chain solutions, advisory services, performance improvement collaborative and other services. The Company plays a role in the healthcare industry, collaborating with members to co-develop long-term innovations that reinvent and improve the way care is delivered to patients nationwide.

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