Critical Comparison: Diversicare Healthcare Services (DVCR) & Genesis Healthcare (GEN)

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Diversicare Healthcare Services (NASDAQ:DVCR) and Genesis Healthcare (NYSE:GEN) are both small-cap medical companies, but which is the superior stock? We will contrast the two businesses based on the strength of their dividends, risk, institutional ownership, earnings, profitability, valuation and analyst recommendations.

Dividends

Diversicare Healthcare Services pays an annual dividend of $0.22 per share and has a dividend yield of 3.6%. Genesis Healthcare does not pay a dividend.

Profitability

This table compares Diversicare Healthcare Services and Genesis Healthcare’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Diversicare Healthcare Services -1.21% -86.44% -4.00%
Genesis Healthcare -10.95% N/A -2.61%

Earnings and Valuation

This table compares Diversicare Healthcare Services and Genesis Healthcare’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Diversicare Healthcare Services $574.79 million 0.07 -$4.82 million N/A N/A
Genesis Healthcare $5.37 billion 0.05 -$578.98 million ($2.11) -0.74

Diversicare Healthcare Services has higher earnings, but lower revenue than Genesis Healthcare.

Analyst Ratings

This is a breakdown of current ratings and price targets for Diversicare Healthcare Services and Genesis Healthcare, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Diversicare Healthcare Services 0 0 0 0 N/A
Genesis Healthcare 0 3 1 0 2.25

Genesis Healthcare has a consensus price target of $3.19, suggesting a potential upside of 103.03%. Given Genesis Healthcare’s higher possible upside, analysts clearly believe Genesis Healthcare is more favorable than Diversicare Healthcare Services.

Institutional & Insider Ownership

19.5% of Diversicare Healthcare Services shares are owned by institutional investors. Comparatively, 19.7% of Genesis Healthcare shares are owned by institutional investors. 38.7% of Diversicare Healthcare Services shares are owned by insiders. Comparatively, 58.1% of Genesis Healthcare shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Diversicare Healthcare Services has a beta of 0.44, meaning that its stock price is 56% less volatile than the S&P 500. Comparatively, Genesis Healthcare has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500.

Summary

Genesis Healthcare beats Diversicare Healthcare Services on 8 of the 12 factors compared between the two stocks.

About Diversicare Healthcare Services

Diversicare Healthcare Services, Inc. provides post-acute care services to skilled nursing center, patients, and residents primarily in the Southeast, Midwest, and Southwest United States. The company offers skilled nursing health care services, including nutrition, recreational therapy, social, housekeeping, and laundry services; the delivery of ancillary medical services at the nursing centers; rehabilitation therapy services, such as audiology, speech, occupational, and physical therapies; and medical supplies, nutritional support, infusion therapies, and related clinical services. As of March 1, 2018, it operated 76 nursing centers with 8,945 licensed nursing beds. The company was formerly known as Advocat Inc. and changed its name to Diversicare Healthcare Services, Inc. in March 2013. Diversicare Healthcare Services, Inc. was founded in 1994 and is based in Brentwood, Tennessee.

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, 2017, it provided inpatient services through a network of 470 skilled nursing and assisted/senior living facilities, including 444 skilled nursing facilities and 26 stand-alone assisted/senior living facilities across 30 states. Genesis HealthCare, Inc. also supplied rehabilitation and respiratory therapy to approximately 1,600 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.

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