TeamHealth (TMH) and HealthSouth (HLS) Head to Head Review

TeamHealth (NYSE: TMH) and HealthSouth (NYSE:HLS) are both healthcare companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, valuation and profitability.

Analyst Ratings

This is a summary of recent ratings and recommmendations for TeamHealth and HealthSouth, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TeamHealth 0 3 0 0 2.00
HealthSouth 1 2 6 0 2.56

TeamHealth currently has a consensus price target of $43.50, indicating a potential upside of 0.00%. HealthSouth has a consensus price target of $51.71, indicating a potential upside of 5.20%. Given HealthSouth’s stronger consensus rating and higher possible upside, analysts plainly believe HealthSouth is more favorable than TeamHealth.

Profitability

This table compares TeamHealth and HealthSouth’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TeamHealth 0.92% 5.98% 0.99%
HealthSouth 8.67% 23.56% 7.03%

Insider & Institutional Ownership

92.4% of HealthSouth shares are owned by institutional investors. 1.3% of TeamHealth shares are owned by insiders. Comparatively, 1.6% of HealthSouth shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares TeamHealth and HealthSouth’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
TeamHealth N/A N/A N/A $0.26 167.31
HealthSouth $3.71 billion 1.30 $247.60 million $2.75 17.88

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

Dividends

HealthSouth pays an annual dividend of $1.00 per share and has a dividend yield of 2.0%. TeamHealth does not pay a dividend. HealthSouth pays out 36.4% of its earnings in the form of a dividend. TeamHealth has raised its dividend for 3 consecutive years.

Summary

HealthSouth beats TeamHealth on 11 of the 13 factors compared between the two stocks.

About TeamHealth

Team Health Holdings, Inc. is a United States-based physician services company. The Company supplies outsourced healthcare professional staffing and administrative services to hospitals and other healthcare providers in the United States. It operates through four segments: Hospital Based Services, IPC Healthcare, Specialty Services and Other Services. The Hospital Based Services segment provides healthcare service programs to users of healthcare services on a fee for service, and on a cost plus or contract basis. The IPC Healthcare segment provides acute hospital medicine and post-acute provider service programs to users of healthcare services. The Specialty Services segment provides healthcare service programs to users of healthcare services in an outpatient setting or in a non-hospital-based environment. The Other Services segment is an aggregation of locums staffing, scribes, and billing, collection and consulting services that provides a range of other healthcare services.

About HealthSouth

HealthSouth Corporation (HealthSouth) is a provider of post-acute healthcare services, offering both facility-based and home-based post-acute services in 35 states and Puerto Rico through its network of inpatient rehabilitation hospitals, home health agencies and hospice agencies. The Company manages its operations through segments, including inpatient rehabilitation, and home health and hospice. It is an owner and operator of inpatient rehabilitation hospitals. It provides specialized rehabilitative treatment on both an inpatient and outpatient basis. It offers its home health and hospice services through Encompass Home Health and Hospice business (Encompass). Encompass operates home health and hospice agencies in 25 states, with concentrations in the Southeast, Oklahoma, and Texas. As of December 31, 2016, the Company operated 123 inpatient rehabilitation hospitals. As of December 31, 2016, the Company managed five inpatient rehabilitation units through management contracts.

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