Surgical Care Affiliates (NASDAQ: SCAI) and American Renal Associates (NYSE:ARA) are both healthcare companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, analyst recommendations, risk, earnings and profitability.
This table compares Surgical Care Affiliates and American Renal Associates’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Surgical Care Affiliates||21.52%||13.07%||12.83%|
|American Renal Associates||-2.15%||15.80%||2.34%|
This is a summary of recent ratings for Surgical Care Affiliates and American Renal Associates, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Surgical Care Affiliates||0||2||0||0||2.00|
|American Renal Associates||0||0||4||0||3.00|
Surgical Care Affiliates presently has a consensus target price of $50.00, suggesting a potential downside of 10.51%. American Renal Associates has a consensus target price of $20.00, suggesting a potential upside of 19.05%. Given American Renal Associates’ stronger consensus rating and higher probable upside, analysts plainly believe American Renal Associates is more favorable than Surgical Care Affiliates.
Institutional & Insider Ownership
93.3% of American Renal Associates shares are owned by institutional investors. 3.3% of Surgical Care Affiliates shares are owned by company insiders. Comparatively, 12.6% of American Renal Associates shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Surgical Care Affiliates and American Renal Associates’ top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Surgical Care Affiliates||N/A||N/A||N/A||$0.86||64.97|
|American Renal Associates||$749.77 million||0.70||-$380,000.00||($0.33)||-50.91|
Surgical Care Affiliates has higher earnings, but lower revenue than American Renal Associates. American Renal Associates is trading at a lower price-to-earnings ratio than Surgical Care Affiliates, indicating that it is currently the more affordable of the two stocks.
American Renal Associates beats Surgical Care Affiliates on 7 of the 10 factors compared between the two stocks.
About Surgical Care Affiliates
Surgical Care Affiliates, Inc. is a provider of solutions to physicians, health plans and health systems to optimize surgical care. The Company offers tools and systems in the areas of clinical benchmarking, clinical best practices, operating efficiency, care coordination and supply chain management. As of December 31, 2016, the Company operated a network of surgical facilities in the United States, which included 197 ambulatory surgery centers (ASCs) and seven surgical hospitals in partnership with approximately 3,000 physician partners. The Company’s operations consist of its ownership and management of ASCs and surgical hospitals. Its ASCs provide the facilities, equipment, supplies and clinical support staff necessary to provide non-emergency surgical services to patients not requiring hospitalization. Its surgical hospitals allow physicians to perform a range of surgical procedures, including surgeries, and allow patients to stay in the hospital for several nights to recover.
About American Renal Associates
American Renal Associates Holdings, Inc. is a dialysis service provider in the United States focused on joint venture (JV) partnerships with physicians. As of December 31, 2016, the Company owned and operated 214 dialysis clinics in partnership with 379 nephrologist partners treating over 14,000 patients in 25 states and the District of Columbia. The Company operates its dialysis clinics exclusively through a JV model, in which it partners primarily with local nephrologists to develop, own and operate dialysis clinics, while the providers of the majority of dialysis services in the United States operate through a combination of subsidiaries and joint ventures. It provides patient care and clinical outcomes to patients suffering from end-stage renal disease (ESRD). Its clinics offer both in center and home dialysis options to meet the needs of patients. Its clinics primarily provide in center hemodialysis treatments and ancillary items and services.
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