Analyzing AMERIGROUP (NYSE:AGP) & Quorum Health (QHC)

Quorum Health (NYSE: QHC) and AMERIGROUP (NYSE:AGP) are both medical companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, profitability, valuation, risk and earnings.

Analyst Recommendations

This is a summary of current recommendations and price targets for Quorum Health and AMERIGROUP, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Quorum Health 0 4 0 0 2.00
AMERIGROUP 0 0 0 0 N/A

Quorum Health currently has a consensus price target of $3.88, suggesting a potential downside of 39.83%. Given Quorum Health’s higher probable upside, equities analysts clearly believe Quorum Health is more favorable than AMERIGROUP.

Risk & Volatility

Quorum Health has a beta of 5.03, suggesting that its share price is 403% more volatile than the S&P 500. Comparatively, AMERIGROUP has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500.

Profitability

This table compares Quorum Health and AMERIGROUP’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Quorum Health -8.28% -38.34% -3.34%
AMERIGROUP N/A N/A N/A

Insider & Institutional Ownership

82.1% of Quorum Health shares are held by institutional investors. 4.7% of Quorum Health shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Quorum Health and AMERIGROUP’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Quorum Health $2.42 billion 0.08 -$347.68 million ($6.30) -1.02
AMERIGROUP N/A N/A N/A $2.56 2.05

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

Quorum Health Company Profile

Quorum Health Corporation is an operator and manager of general acute care hospitals and outpatient services in the United States. The Company operates in two segments: Hospital operations, which includes its general acute care hospitals and related healthcare entities that provide inpatient and outpatient healthcare services, and hospital management advisory and consulting services, which includes Quorum Health Resources, LLC (QHR). It operates QHR, which is a hospital management advisory and consulting services that provides services to non-affiliated general acute care hospitals. Its hospitals and its affiliated businesses offer services, such as general acute care, emergency room, general and specialty surgery and rehabilitation services.

AMERIGROUP Company Profile

AMERIGROUP Corporation is a multi-state managed healthcare company focused on serving people who receive healthcare benefits through publicly funded healthcare programs, including Medicaid, Children’s Health Insurance Program (CHIP), Medicaid expansion programs and Medicare Advantage. The Company offers a continuum of care management, including disease management, pharmacy integration, centralized telephonic case management, in-person case management within healthcare facilities, and home visit case management for some of its members. As of December 31, 2011, the Company provided a number of healthcare products to approximately 2,024,000 members. Effective February 1, 2012, it provides managed care services in Louisiana. On May 1, 2012, it acquired Health Plus. In November 2012, the Company sold its Virginia health plan to Inova Health System Foundation. In December 2012, WellPoint Inc acquired the Company.

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