Critical Review: Acadia Healthcare (ACHC) vs. Hanger (HNGR)

Acadia Healthcare (NASDAQ: ACHC) and Hanger (OTCMKTS:HNGR) are both medical companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, valuation, institutional ownership, risk, dividends, earnings and analyst recommendations.

Risk and Volatility

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Acadia Healthcare has a beta of 0.63, suggesting that its share price is 37% less volatile than the S&P 500. Comparatively, Hanger has a beta of 4.15, suggesting that its share price is 315% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Acadia Healthcare and Hanger, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Acadia Healthcare 0 5 11 0 2.69
Hanger 0 1 0 0 2.00

Acadia Healthcare presently has a consensus price target of $44.50, indicating a potential upside of 14.69%. Hanger has a consensus price target of $17.00, indicating a potential upside of 1.07%. Given Acadia Healthcare’s stronger consensus rating and higher possible upside, analysts clearly believe Acadia Healthcare is more favorable than Hanger.

Earnings & Valuation

This table compares Acadia Healthcare and Hanger’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Acadia Healthcare $2.84 billion 1.21 $199.83 million $2.30 16.87
Hanger $1.04 billion 0.59 -$106.47 million $0.39 43.13

Acadia Healthcare has higher revenue and earnings than Hanger. Acadia Healthcare is trading at a lower price-to-earnings ratio than Hanger, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Acadia Healthcare and Hanger’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Acadia Healthcare 6.92% 8.16% 3.15%
Hanger N/A N/A N/A

Insider and Institutional Ownership

3.4% of Hanger shares are held by institutional investors. 2.5% of Acadia Healthcare shares are held by insiders. Comparatively, 2.4% of Hanger shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

Acadia Healthcare beats Hanger on 11 of the 14 factors compared between the two stocks.

About Acadia Healthcare

Acadia Healthcare Company, Inc. is a provider of behavioral healthcare services, with operations in the United States and the United Kingdom. The Company focuses on acquiring and developing behavioral healthcare facilities. The Company operates through two segments: U.S. Facilities and U.K. Facilities. The Company is engaged in operating acute inpatient psychiatric facilities, specialty treatment facilities, residential treatment centers and facilities providing outpatient behavioral healthcare services. As of December 31, 2016, the U.S. Facilities segment included 208 behavioral healthcare facilities with approximately 8,500 beds in 39 states and Puerto Rico, and the U.K. Facilities segment included 365 behavioral healthcare facilities with approximately 8,600 beds in the United Kingdom. As of December 31, 2016, the Company had operated 573 behavioral healthcare facilities with approximately 17,100 beds in 39 states, the United Kingdom and Puerto Rico.

About Hanger

Hanger, Inc. provides orthotic and prosthetic (O&P) patient care services; and distributes O&P devices, manages O&P networks, and provides therapeutic solutions to patients and businesses in acute, post-acute, and clinic settings in the United States. It operates in two segments, Patient Care and Products & Services. The Patient Care segment owns and operates Hanger clinic, which specializes in the design, fabrication, and delivery of custom O&P devices through patient care clinics and satellite locations; and provides payor network contracting services to other O&P providers. The Products & Services segment procures and distributes O&P parts, componentry, and devices to independent O&P providers; and develops specialized rehabilitation technologies and provides evidence-based clinical programs for post-acute rehabilitation to patients at approximately 4,000 skilled nursing and post-acute providers. This segment also manufactures and sells therapeutic footwear for diabetic patients in the podiatric market. As of January 19, 2018, the company owned and operated approximately 800 patient care clinics in the United States. The company was formerly known as Hanger Orthopedic Group, Inc. and changed its name to Hanger, Inc. in June 2012. Hanger, Inc. was founded in 1861 and is headquartered in Austin, Texas.

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