Contrasting Community Health Systems (CYH) & Surgery Partners (SGRY)

Community Health Systems (NYSE: CYH) and Surgery Partners (NASDAQ:SGRY) are both small-cap medical companies, but which is the better stock? We will compare the two businesses based on the strength of their analyst recommendations, valuation, earnings, dividends, institutional ownership, risk and profitability.

Analyst Recommendations

This is a breakdown of recent ratings for Community Health Systems and Surgery Partners, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Community Health Systems 6 10 0 0 1.63
Surgery Partners 1 3 4 0 2.38

Community Health Systems presently has a consensus target price of $5.50, indicating a potential upside of 33.50%. Surgery Partners has a consensus target price of $17.67, indicating a potential upside of 5.47%. Given Community Health Systems’ higher possible upside, research analysts clearly believe Community Health Systems is more favorable than Surgery Partners.

Valuation and Earnings

This table compares Community Health Systems and Surgery Partners’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Community Health Systems $15.35 billion 0.03 -$2.46 billion ($1.20) -3.43
Surgery Partners $1.34 billion 0.61 -$52.98 million ($0.84) -19.94

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

Profitability

This table compares Community Health Systems and Surgery Partners’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Community Health Systems -16.01% -14.18% -0.63%
Surgery Partners -4.54% -0.53% -0.13%

Risk & Volatility

Community Health Systems has a beta of 1.59, indicating that its share price is 59% more volatile than the S&P 500. Comparatively, Surgery Partners has a beta of 1.8, indicating that its share price is 80% more volatile than the S&P 500.

Summary

Surgery Partners beats Community Health Systems on 9 of the 12 factors compared between the two stocks.

Community Health Systems Company Profile

Community Health Systems, Inc., together with its subsidiaries, owns, leases, and operates general acute care hospitals in the United States. It offers general acute care, emergency room, general and specialty surgery, critical care, internal medicine, obstetrics, diagnostic, psychiatric, and rehabilitation services, as well as skilled nursing and home care services. The company also provides outpatient services at urgent care centers, occupational medicine clinics, imaging centers, cancer centers, and ambulatory surgery centers. As of December 31, 2017, it owned or leased 125 hospitals, including 123 general acute care hospitals and 2 stand-alone rehabilitation or psychiatric hospitals with an aggregate of 20,850 licensed beds in 19 states. The company was founded in 1985 and is headquartered in Franklin, Tennessee.

Surgery Partners Company Profile

Surgery Partners, Inc. is healthcare services holding company, which engages in the provision of solutions for surgical and related ancillary care in support of its patients and physicians. It operates through the following business segments: Surgical Facility Services; Ancillary Services; and Optical Services. The Surgical Facility Services segment consists of the operation of ambulatory surgery centers and surgical hospitals, and includes the anesthesia services of the company. The Ancillary Services segment operates a diagnostic laboratory and multi-specialty physician practices. The Optical Services segment involves an optical laboratory and an optical products group purchasing organization. The company was founded in 2004 and is headquartered in Nashville, TN.

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