Critical Analysis: Acadia Healthcare Company (ACHC) vs. Envision Healthcare Corp (AMSG)

Acadia Healthcare Company (NASDAQ: ACHC) and Envision Healthcare Corp (NASDAQ:AMSG) are both medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, profitabiliy, earnings, dividends and institutional ownership.

Valuation & Earnings

This table compares Acadia Healthcare Company and Envision Healthcare Corp’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Acadia Healthcare Company $2.87 billion 1.38 $585.16 million $0.17 266.25
Envision Healthcare Corp N/A N/A N/A $3.26 20.78

Acadia Healthcare Company has higher revenue and earnings than Envision Healthcare Corp. Envision Healthcare Corp is trading at a lower price-to-earnings ratio than Acadia Healthcare Company, indicating that it is currently the more affordable of the two stocks.

Risk & Volatility

Acadia Healthcare Company has a beta of 1.11, suggesting that its stock price is 11% more volatile than the S&P 500. Comparatively, Envision Healthcare Corp has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings for Acadia Healthcare Company and Envision Healthcare Corp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Acadia Healthcare Company 0 3 7 1 2.82
Envision Healthcare Corp 0 1 7 0 2.88

Acadia Healthcare Company currently has a consensus target price of $57.82, suggesting a potential upside of 27.75%. Envision Healthcare Corp has a consensus target price of $85.60, suggesting a potential upside of 26.35%. Given Acadia Healthcare Company’s higher possible upside, equities research analysts clearly believe Acadia Healthcare Company is more favorable than Envision Healthcare Corp.

Institutional and Insider Ownership

98.7% of Envision Healthcare Corp shares are held by institutional investors. 11.1% of Acadia Healthcare Company shares are held by company insiders. Comparatively, 2.3% of Envision Healthcare Corp shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Acadia Healthcare Company and Envision Healthcare Corp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Acadia Healthcare Company 0.53% 8.89% 3.20%
Envision Healthcare Corp 6.06% 8.05% 3.21%

Summary

Acadia Healthcare Company beats Envision Healthcare Corp on 6 of the 11 factors compared between the two stocks.

Acadia Healthcare Company Company Profile

Acadia Healthcare Company, Inc. is a provider of behavioral healthcare services, with operations in the United States and the United Kingdom. The Company focuses on acquiring and developing behavioral healthcare facilities. The Company operates through two segments: U.S. Facilities and U.K. Facilities. The Company is engaged in operating acute inpatient psychiatric facilities, specialty treatment facilities, residential treatment centers and facilities providing outpatient behavioral healthcare services. As of December 31, 2016, the U.S. Facilities segment included 208 behavioral healthcare facilities with approximately 8,500 beds in 39 states and Puerto Rico, and the U.K. Facilities segment included 365 behavioral healthcare facilities with approximately 8,600 beds in the United Kingdom. As of December 31, 2016, the Company had operated 573 behavioral healthcare facilities with approximately 17,100 beds in 39 states, the United Kingdom and Puerto Rico.

Envision Healthcare Corp Company Profile

Envision Healthcare Corporation is a provider of healthcare services. The Company offers a range clinical solutions, including physician-led services, medical transportation, ambulatory services and post-acute services. The Company operates through three segments: physician services, medical transportation and ambulatory services. The physician services segment includes the Company’s hospital-based and non-hospital-based physician services business. The medical transportation segment includes the Company’s community-based medical transportation services, including emergency 911, non-emergency, managed transportation, air ambulance and disaster response services. The ambulatory services segment includes the Company’s ambulatory surgery business, which acquires, develops, owns and operates ambulatory surgery centers (ASCs) and surgical hospitals in partnership with physicians and health systems.

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