LHC Group (NASDAQ: LHCG) and Accretive Health (NASDAQ:RCM) are both small-cap healthcare companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, profitability, earnings, dividends, risk and valuation.
Earnings & Valuation
This table compares LHC Group and Accretive Health’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|LHC Group||$914.82 million||1.40||$36.58 million||$2.32||30.25|
|Accretive Health||$592.56 million||0.69||$177.07 million||($0.26)||-15.00|
Accretive Health has higher revenue, but lower earnings than LHC Group. Accretive Health is trading at a lower price-to-earnings ratio than LHC Group, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
LHC Group has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500. Comparatively, Accretive Health has a beta of -0.49, indicating that its stock price is 149% less volatile than the S&P 500.
Institutional and Insider Ownership
82.6% of LHC Group shares are held by institutional investors. Comparatively, 49.6% of Accretive Health shares are held by institutional investors. 14.8% of LHC Group shares are held by company insiders. Comparatively, 62.0% of Accretive Health shares are held by company 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.
This is a breakdown of recent ratings for LHC Group and Accretive Health, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
LHC Group presently has a consensus price target of $76.67, suggesting a potential upside of 9.24%. Accretive Health has a consensus price target of $5.00, suggesting a potential upside of 28.21%. Given Accretive Health’s higher probable upside, analysts plainly believe Accretive Health is more favorable than LHC Group.
This table compares LHC Group and Accretive Health’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
LHC Group beats Accretive Health on 10 of the 13 factors compared between the two stocks.
About LHC Group
LHC Group, Inc. is a holding company. The Company provides post-acute healthcare services to patients through its home nursing agencies, hospice agencies, community-based services agencies and long-term acute care hospitals (LTACHs). The Company operates through four segments: home health services, hospice services, community-based services and facility-based services. Through its home health services segment, the Company offers a range of services, including skilled nursing, medically oriented social services, and physical, occupational and speech therapy. Through its hospice services segment, the Company offers a range of services, including pain and symptom management, and emotional and spiritual support. Its community-based service operations offer a range of services to patients in their home or in a medical facility. The services range from assistance with grooming, medication reminders and meal preparation. It provides facility-based services principally through its LTACHs.
About Accretive Health
R1 RCM Inc., formerly Accretive Health, Inc., is a provider of revenue cycle management (RCM) and physician advisory services (PAS) to healthcare providers. The Company is engaged in providing management services of revenue cycle operations for the United States-based hospitals and other medical services providers. Its primary service offering consists of end-to-end RCM, which the Company deploys through a co-managed relationship or an operating partner relationship. The Company’s PAS offering assists hospitals in complying with payer requirements regarding whether to classify a hospital visit as an in-patient or an out-patient observation case for billing purposes. The Company also provides customers with retrospective appeal management service support for both governmental and commercial payers. Its physicians conduct detailed retrospective reviews of medical records to identify medical necessity for hospital services and the required documentation to support an appeal.
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