Reviewing AMERIGROUP (AGP) and Premier (PINC)

AMERIGROUP (NYSE: AGP) and Premier (NASDAQ:PINC) are both mid-cap healthcare companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, valuation, institutional ownership, earnings, dividends and risk.

Earnings and Valuation

This table compares AMERIGROUP and Premier’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AMERIGROUP N/A N/A N/A $2.56 35.82
Premier $1.45 billion 2.84 $113.42 million ($2.46) -12.04

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

Risk & Volatility

AMERIGROUP has a beta of 1.08, indicating that its stock price is 8% more volatile than the S&P 500. Comparatively, Premier has a beta of 0.4, indicating that its stock price is 60% less volatile than the S&P 500.

Insider & Institutional Ownership

38.3% of Premier shares are owned by institutional investors. 17.5% of Premier shares are owned 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.

Profitability

This table compares AMERIGROUP and Premier’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AMERIGROUP N/A N/A N/A
Premier 17.99% -18.31% 10.21%

Analyst Recommendations

This is a summary of recent ratings and price targets for AMERIGROUP and Premier, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AMERIGROUP 0 0 0 0 N/A
Premier 1 1 7 0 2.67

Premier has a consensus price target of $38.86, indicating a potential upside of 31.23%. Given Premier’s higher possible upside, analysts clearly believe Premier is more favorable than AMERIGROUP.

Summary

Premier beats AMERIGROUP on 7 of the 10 factors compared between the two stocks.

About AMERIGROUP

AMERIGROUP Corporation is a multi-state managed healthcare company focused on serving people who receive healthcare benefits through publicly funded healthcare programs, including Medicaid, Children’s Health Insurance Program (CHIP), Medicaid expansion programs and Medicare Advantage. The Company offers a continuum of care management, including disease management, pharmacy integration, centralized telephonic case management, in-person case management within healthcare facilities, and home visit case management for some of its members. As of December 31, 2011, the Company provided a number of healthcare products to approximately 2,024,000 members. Effective February 1, 2012, it provides managed care services in Louisiana. On May 1, 2012, it acquired Health Plus. In November 2012, the Company sold its Virginia health plan to Inova Health System Foundation. In December 2012, WellPoint Inc acquired the Company.

About Premier

Premier, Inc. is a healthcare improvement company. The Company is uniting an alliance of approximately 3,900 United States hospitals and health systems and approximately 150,000 other providers and 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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