Critical Review: HCA Healthcare (HCA) vs. Its Peers

HCA Healthcare (NYSE:HCA) is one of 233 public companies in the “Healthcare Providers & Services” industry, but how does it contrast to its competitors? We will compare HCA Healthcare to related companies based on the strength of its institutional ownership, analyst recommendations, dividends, valuation, risk, profitability and earnings.

Institutional and Insider Ownership

62.7% of HCA Healthcare shares are held by institutional investors. Comparatively, 56.7% of shares of all “Healthcare Providers & Services” companies are held by institutional investors. 1.5% of HCA Healthcare shares are held by insiders. Comparatively, 15.0% of shares of all “Healthcare Providers & Services” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility & Risk

HCA Healthcare has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500. Comparatively, HCA Healthcare’s competitors have a beta of 0.99, meaning that their average share price is 1% less volatile than the S&P 500.

Dividends

HCA Healthcare pays an annual dividend of $3.12 per share and has a dividend yield of 0.6%. HCA Healthcare pays out 10.3% of its earnings in the form of a dividend. As a group, “Healthcare Providers & Services” companies pay a dividend yield of 1.5% and pay out 25.8% of their earnings in the form of a dividend. HCA Healthcare has increased its dividend for 6 consecutive years.

Profitability

This table compares HCA Healthcare and its competitors’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HCA Healthcare	8.61%	-198.52%	10.81%
HCA Healthcare Competitors	-8.01%	-140.31%	-1.38%

Analyst Ratings

This is a breakdown of current ratings and price targets for HCA Healthcare and its competitors, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HCA Healthcare	1	7	16	0	2.62
HCA Healthcare Competitors	1859	7716	13322	815	2.55

HCA Healthcare currently has a consensus target price of $480.13, suggesting a potential downside of 2.89%. As a group, “Healthcare Providers & Services” companies have a potential upside of 15.59%. Given HCA Healthcare’s competitors higher probable upside, analysts plainly believe HCA Healthcare has less favorable growth aspects than its competitors.

Earnings & Valuation

This table compares HCA Healthcare and its competitors gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
HCA Healthcare	$78.70 billion	$6.78 billion	16.38
HCA Healthcare Competitors	$19.20 billion	$288.54 million	14.48

HCA Healthcare has higher revenue and earnings than its competitors. HCA Healthcare is trading at a higher price-to-earnings ratio than its competitors, indicating that it is currently more expensive than other companies in its industry.

Summary

HCA Healthcare beats its competitors on 10 of the 15 factors compared.

About HCA Healthcare

HCA Healthcare, Inc., through its subsidiaries, owns and operates hospitals and related healthcare entities in the United States. It operates general and acute care hospitals that offers medical and surgical services, including inpatient care, intensive care, cardiac care, diagnostic, and emergency services; and outpatient services, such as outpatient surgery, laboratory, radiology, respiratory therapy, cardiology, and physical therapy. The company also operates outpatient health care facilities consisting of freestanding ambulatory surgery centers, freestanding emergency care facilities, urgent care facilities, walk-in clinics, diagnostic and imaging centers, rehabilitation and physical therapy centers, radiation and oncology therapy centers, physician practices, and various other facilities. In addition, it operates behavioral hospitals, which provide therapeutic programs comprising child, adolescent and adult psychiatric care, adolescent and adult alcohol, drug abuse treatment, and counseling services. The company was formerly known as HCA Holdings, Inc. HCA Healthcare, Inc. was founded in 1968 and is headquartered in Nashville, Tennessee.