Analyzing Community Health Systems (CYH) and LifePoint Health (LPNT)

Community Health Systems (NYSE: CYH) and LifePoint Health (NASDAQ:LPNT) are both small-cap healthcare companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, risk, dividends, institutional ownership and profitability.

Volatility and Risk

Community Health Systems has a beta of 1.42, indicating that its stock price is 42% more volatile than the S&P 500. Comparatively, LifePoint Health has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Community Health Systems and LifePoint Health, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Community Health Systems 5 9 0 0 1.64
LifePoint Health 1 11 5 0 2.24

Community Health Systems currently has a consensus price target of $5.46, suggesting a potential upside of 5.99%. LifePoint Health has a consensus price target of $58.08, suggesting a potential upside of 17.09%. Given LifePoint Health’s stronger consensus rating and higher probable upside, analysts plainly believe LifePoint Health is more favorable than Community Health Systems.

Earnings & Valuation

This table compares Community Health Systems and LifePoint Health’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Community Health Systems $18.44 billion 0.03 -$1.72 billion ($5.82) -0.88
LifePoint Health $7.27 billion 0.27 $121.90 million $4.22 11.75

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

Profitability

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

Net Margins Return on Equity Return on Assets
Community Health Systems -3.97% -3.10% -0.22%
LifePoint Health 2.45% 7.01% 2.53%

Summary

LifePoint Health beats Community Health Systems on 10 of the 12 factors compared between the two stocks.

About Community Health Systems

Community Health Systems, Inc. is an operator of general acute care hospitals and outpatient facilities in communities across the country. The Company operates through hospital operations segment, which includes its general acute care hospitals and related healthcare entities that provide inpatient and outpatient healthcare services. The Company provides healthcare services through the hospitals that it owns and operates and affiliated businesses in non-urban and selected urban markets throughout the United States. The services provided through its hospitals and affiliated businesses include general acute care, emergency room, general and specialty surgery, critical care, internal medicine, obstetrics, diagnostic, psychiatric and rehabilitation services. The Company also provides additional outpatient services at urgent care centers, occupational medicine clinics, imaging centers, cancer centers, ambulatory surgery centers, and home health and hospice agencies.

About LifePoint Health

LifePoint Health, Inc., through its subsidiaries, owns and operates community hospitals, regional health systems, physician practices, outpatient centers and post-acute facilities. As of December 31, 2016, the Company operated 72 hospital campuses in 22 states, having a total of 9,424 licensed beds. It offers a range of general and specialized healthcare services to patients through a network of hospitals and outpatient facilities. Its services include general surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic care, coronary care, rehabilitation services and pediatric services, and in some of its hospitals, the Company offers specialized services, such as open-heart surgery, skilled nursing, psychiatric care and neuro-surgery. It provides outpatient services, such as same-day surgery, laboratory, x-ray, respiratory therapy, imaging, sports medicine and lithotripsy.

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