Critical Review: Quorum Health Corporation (QHC) and Envision Healthcare Corp (AMSG)

Quorum Health Corporation (NYSE: QHC) and Envision Healthcare Corp (NASDAQ:AMSG) are both medical companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, risk, dividends, valuation and profitability.

Analyst Ratings

This is a summary of recent ratings and target prices for Quorum Health Corporation and Envision Healthcare Corp, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Quorum Health Corporation 1 4 0 0 1.80
Envision Healthcare Corp 0 1 5 0 2.83

Quorum Health Corporation presently has a consensus price target of $4.60, indicating a potential upside of 19.48%. Envision Healthcare Corp has a consensus price target of $85.60, indicating a potential upside of 26.35%. Given Envision Healthcare Corp’s stronger consensus rating and higher probable upside, analysts clearly believe Envision Healthcare Corp is more favorable than Quorum Health Corporation.

Profitability

This table compares Quorum Health Corporation and Envision Healthcare Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Quorum Health Corporation -7.13% -61.90% -6.46%
Envision Healthcare Corp 4.64% 1.89% 2.09%

Risk and Volatility

Quorum Health Corporation has a beta of 9.5, meaning that its share price is 850% more volatile than the S&P 500. Comparatively, Envision Healthcare Corp has a beta of 0.72, meaning that its share price is 28% less volatile than the S&P 500.

Institutional & Insider Ownership

87.9% of Quorum Health Corporation shares are owned by institutional investors. Comparatively, 98.7% of Envision Healthcare Corp shares are owned by institutional investors. 4.7% of Quorum Health Corporation shares are owned by insiders. Comparatively, 2.3% of Envision Healthcare Corp shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Quorum Health Corporation and Envision Healthcare Corp’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Quorum Health Corporation $2.12 billion 0.06 $93.09 million N/A N/A
Envision Healthcare Corp N/A N/A N/A $3.26 20.78

Quorum Health Corporation has higher revenue and earnings than Envision Healthcare Corp.

Summary

Envision Healthcare Corp beats Quorum Health Corporation on 7 of the 10 factors compared between the two stocks.

About Quorum Health Corporation

Quorum Health Corporation is an operator and manager of general acute care hospitals and outpatient services in the United States. The Company operates in two segments: Hospital operations, which includes its general acute care hospitals and related healthcare entities that provide inpatient and outpatient healthcare services, and hospital management advisory and consulting services, which includes Quorum Health Resources, LLC (QHR). It operates QHR, which is a hospital management advisory and consulting services that provides services to non-affiliated general acute care hospitals. Its hospitals and its affiliated businesses offer services, such as general acute care, emergency room, general and specialty surgery and rehabilitation services. On April 1, 2016, Community Health Systems, Inc. announced that its board of directors has approved the distribution to its stockholders of 100% of the common stock of a new, independent publicly traded company, Quorum Health Corporation.

About Envision Healthcare Corp

Envision Healthcare Corporation is a provider of healthcare services. The Company offers a range clinical solutions, including physician-led services, medical transportation, ambulatory services and post-acute services. The Company operates through three segments: physician services, medical transportation and ambulatory services. The physician services segment includes the Company’s hospital-based and non-hospital-based physician services business. The medical transportation segment includes the Company’s community-based medical transportation services, including emergency 911, non-emergency, managed transportation, air ambulance and disaster response services. The ambulatory services segment includes the Company’s ambulatory surgery business, which acquires, develops, owns and operates ambulatory surgery centers (ASCs) and surgical hospitals in partnership with physicians and health systems.

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