Financial Review: Genesis Healthcare (NYSE:GEN) and The Pennant Group (NYSE:PNTG)

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

Earnings and Valuation

This table compares Genesis Healthcare and The Pennant Group’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Genesis Healthcare $4.98 billion 0.05 -$235.23 million ($1.55) -1.03
The Pennant Group N/A N/A N/A N/A N/A

The Pennant Group has lower revenue, but higher earnings than Genesis Healthcare.

Insider & Institutional Ownership

20.8% of Genesis Healthcare shares are held by institutional investors. Comparatively, 0.0% of The Pennant Group shares are held by institutional investors. 35.2% of Genesis Healthcare shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Genesis Healthcare and The Pennant Group, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Genesis Healthcare 0 1 1 0 2.50
The Pennant Group 0 1 0 0 2.00

Genesis Healthcare currently has a consensus price target of $2.50, suggesting a potential upside of 57.23%. The Pennant Group has a consensus price target of $20.00, suggesting a potential upside of 22.85%. Given Genesis Healthcare’s stronger consensus rating and higher possible upside, equities analysts plainly believe Genesis Healthcare is more favorable than The Pennant Group.

Profitability

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

Net Margins Return on Equity Return on Assets
Genesis Healthcare -0.93% N/A -0.94%
The Pennant Group N/A N/A N/A

Summary

Genesis Healthcare beats The Pennant Group on 6 of the 8 factors compared between the two stocks.

About Genesis Healthcare

Genesis Healthcare, Inc., together with its subsidiaries, owns and operates skilled nursing facilities and assisted/senior living facilities in the United States. The company operates through three segments: Inpatient Services, Rehabilitation Therapy Services, and All Other Services. It also provides a range of rehabilitation therapy services, including speech-language pathology, physical therapy, occupational therapy, and respiratory therapy. In addition, the company offers other specialty medical services, such as physician, staffing, and other healthcare related services. As of December 31, 2018, it provided inpatient services through a network of 425 skilled nursing and assisted/senior living facilities, including 399 skilled nursing facilities and 26 stand-alone assisted/senior living facilities across 29 states. Genesis HealthCare, Inc. also supplies rehabilitation and respiratory therapy to approximately 1,400 healthcare locations in 46 states and the District of Columbia. The company was formerly known as FC-GEN Operations Investment, LLC and changed its name to Genesis HealthCare, Inc. in February 2015. Genesis HealthCare, Inc. was founded in 2003 and is headquartered in Kennett Square, Pennsylvania.

About The Pennant Group

The Pennant Group, Inc. offers home health, hospice, and senior living services across Arizona, California, Colorado, Idaho, Iowa, Nevada, Oklahoma, Oregon, Texas, Utah, Washington, Wisconsin, and Wyoming. 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, and meals, as well as housekeeping and assistance in the activities of daily living to seniors, who are independent or who require some support. As of June 30, 2019, the company provided home health and hospice services through 62 agencies; and assisted living, independent living, and memory care services in 51 communities with 3,872 total units. The Pennant Group, Inc. was incorporated in 2019 and is headquartered in Eagle, Idaho. The Pennant Group, Inc. operates independently of The Ensign Group, Inc. as of October 1, 2019.

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