Head to Head Review: The Pennant Group (NASDAQ:PNTG) and Chemed (NYSE:CHE)

The Pennant Group (NASDAQ:PNTG) and Chemed (NYSE:CHE) are both medical companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, analyst recommendations, valuation, institutional ownership, risk, earnings and dividends.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for The Pennant Group and Chemed, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
The Pennant Group	0	2	3	0	2.60
Chemed	0	1	3	0	2.75

The Pennant Group presently has a consensus target price of $33.40, suggesting a potential upside of 39.11%. Chemed has a consensus target price of $579.75, suggesting a potential upside of 26.41%. Given The Pennant Group’s higher probable upside, analysts clearly believe The Pennant Group is more favorable than Chemed.

Volatility & Risk

The Pennant Group has a beta of 1.31, suggesting that its share price is 31% more volatile than the S&P 500. Comparatively, Chemed has a beta of 0.46, suggesting that its share price is 54% less volatile than the S&P 500.

Institutional & Insider Ownership

85.9% of The Pennant Group shares are held by institutional investors. Comparatively, 95.9% of Chemed shares are held by institutional investors. 5.4% of The Pennant Group shares are held by insiders. Comparatively, 3.3% of Chemed shares are held 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.

Profitability

This table compares The Pennant Group and Chemed’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
The Pennant Group	3.36%	9.85%	4.04%
Chemed	11.56%	25.83%	17.77%

Valuation and Earnings

This table compares The Pennant Group and Chemed”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
The Pennant Group	$798.92 million	1.04	$22.56 million	$0.78	30.78
Chemed	$2.43 billion	2.75	$302.00 million	$19.45	23.58

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

Summary

Chemed beats The Pennant Group on 9 of the 13 factors compared between the two stocks.

About The Pennant Group

The Pennant Group, Inc. provides healthcare services in the United States. It operates in two segments, Home Health and Hospice Services, and Senior Living Services. The company offers home health services, including clinical services, such as nursing, speech, occupational and physical therapy, medical social work, and home health aide services; and hospice services comprising clinical care, education, and counseling services for the physical, spiritual, and psychosocial needs of terminally ill patients and their families. It also provides senior living services, such as residential accommodations, activities, meals, housekeeping, and assistance in the activities of daily living to seniors who are independent or who require some support. The company operates home health, hospice, and home care agencies, as well as senior living communities throughout Arizona, California, Colorado, Idaho, Montana, Nevada, Oklahoma, Oregon, Texas, Utah, Washington, Wisconsin, and Wyoming. The Pennant Group, Inc. was incorporated in 2019 and is headquartered in Eagle, Idaho.

About Chemed

Chemed Corporation provides hospice and palliative care services to patients through a network of physicians, registered nurses, home health aides, social workers, clergy, and volunteers primarily in the United States. The company operates in VITAS and Roto-Rooter segments. It offers plumbing, drain cleaning, excavation, water restoration, and other related services to residential and commercial customers through company-owned branches, independent contractors, and franchisees. The company was incorporated in 1970 and is headquartered in Cincinnati, Ohio.