Head to Head Comparison: Healthcare Services Group (HCSG) & Brookdale Senior Living (BKD)

Healthcare Services Group (NASDAQ: HCSG) and Brookdale Senior Living (NYSE:BKD) are both business services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their dividends, risk, earnings, institutional ownership, profitability, valuation and analyst recommendations.

Institutional and Insider Ownership

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97.7% of Healthcare Services Group shares are held by institutional investors. Comparatively, 99.8% of Brookdale Senior Living shares are held by institutional investors. 4.3% of Healthcare Services Group shares are held by company insiders. Comparatively, 1.5% of Brookdale Senior Living shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Healthcare Services Group and Brookdale Senior Living, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Healthcare Services Group 0 2 2 0 2.50
Brookdale Senior Living 0 2 3 0 2.60

Healthcare Services Group currently has a consensus price target of $54.00, indicating a potential upside of 31.71%. Brookdale Senior Living has a consensus price target of $9.40, indicating a potential upside of 41.78%. Given Brookdale Senior Living’s stronger consensus rating and higher probable upside, analysts clearly believe Brookdale Senior Living is more favorable than Healthcare Services Group.

Profitability

This table compares Healthcare Services Group and Brookdale Senior Living’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Healthcare Services Group 4.73% 23.17% 14.01%
Brookdale Senior Living -12.04% -8.40% -1.80%

Dividends

Healthcare Services Group pays an annual dividend of $0.76 per share and has a dividend yield of 1.9%. Brookdale Senior Living does not pay a dividend. Healthcare Services Group pays out 63.9% of its earnings in the form of a dividend. Healthcare Services Group has increased its dividend for 10 consecutive years.

Volatility and Risk

Healthcare Services Group has a beta of 0.79, indicating that its share price is 21% less volatile than the S&P 500. Comparatively, Brookdale Senior Living has a beta of 1.78, indicating that its share price is 78% more volatile than the S&P 500.

Valuation & Earnings

This table compares Healthcare Services Group and Brookdale Senior Living’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Healthcare Services Group $1.87 billion 1.62 $88.22 million $1.19 34.45
Brookdale Senior Living $4.75 billion 0.26 -$571.41 million ($0.78) -8.50

Healthcare Services Group has higher earnings, but lower revenue than Brookdale Senior Living. Brookdale Senior Living is trading at a lower price-to-earnings ratio than Healthcare Services Group, indicating that it is currently the more affordable of the two stocks.

Summary

Healthcare Services Group beats Brookdale Senior Living on 10 of the 17 factors compared between the two stocks.

Healthcare Services Group Company Profile

Healthcare Services Group, Inc. provides management, administrative, and operating services to the housekeeping, laundry, linen, facility maintenance, and dietary service departments to nursing homes, retirement complexes, rehabilitation centers, and hospitals in the United States. It operates through two segments, Housekeeping and Dietary. The Housekeeping segment engages in the cleaning, disinfecting, and sanitizing of resident rooms and common areas of client's facility, as well as laundering and processing of the bed linens, uniforms, resident personal clothing, and other assorted linen items utilized at a client facility. The Dietary segment is involved in the food purchasing and meal preparation activities, as well as in the provision of professional dietitian services, which include the development of menus that meet the dietary needs of residents. This segment also offers clinical consulting services to facilities. As of December 31, 2017, the company provided its services to 3,500 facilities. Healthcare Services Group, Inc. was founded in 1976 and is based in Bensalem, Pennsylvania.

Brookdale Senior Living Company Profile

Brookdale Senior Living Inc. owns and operates senior living communities in the United States. It operates through five segments: Retirement Centers, Assisted Living, CCRCs ? Rental, Brookdale Ancillary Services, and Management Services. The Retirement Centers segment owns or leases communities comprising independent living and assisted living units in a single community that are primarily designed for middle to upper income senior citizens. The Assisted Living segment owns or leases communities consisting of freestanding, multi-story communities, and freestanding single story communities, which offer housing and 24-hour assistance with activities of daily life to mid-acuity frail and elderly residents. This segment also operates memory care communities for residents with Alzheimer's disease and other dementias. The CCRCs – Rental segment owns or leases communities that offer various living arrangements and services to accommodate various levels of physical ability and health. The Brookdale Ancillary Services segment provides outpatient therapy, home health, and hospice services; and education and wellness programs to residents of its communities, as well as to other senior living communities. The Management Services segment operates communities under the management agreements. As of December 31, 2017, the company operated 129 retirement center communities with 24,476 units; 822 assisted living communities with 56,718 units; and 72 CCRCs with 19,388 units, as well as owned or leased 794 communities with 66,641 units and provided management services with respect to 229 communities with 33,941 units for third parties or unconsolidated ventures. Brookdale Senior Living Inc. is headquartered in Brentwood, Tennessee.

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