U.S. Physical Therapy (NYSE: USPH) and AAC Holdings (NYSE:AAC) are both small-cap medical companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.
U.S. Physical Therapy pays an annual dividend of $0.80 per share and has a dividend yield of 1.3%. AAC Holdings does not pay a dividend. U.S. Physical Therapy pays out 46.8% of its earnings in the form of a dividend. U.S. Physical Therapy has increased its dividend for 6 consecutive years.
Insider & Institutional Ownership
96.1% of U.S. Physical Therapy shares are owned by institutional investors. Comparatively, 48.0% of AAC Holdings shares are owned by institutional investors. 4.3% of U.S. Physical Therapy shares are owned by company insiders. Comparatively, 37.3% of AAC Holdings shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Earnings & Valuation
This table compares U.S. Physical Therapy and AAC Holdings’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|U.S. Physical Therapy||$377.24 million||2.06||$60.41 million||$1.71||36.08|
|AAC Holdings||$266.82 million||0.76||$30.06 million||($0.20)||-43.35|
U.S. Physical Therapy has higher revenue and earnings than AAC Holdings. AAC Holdings is trading at a lower price-to-earnings ratio than U.S. Physical Therapy, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent recommendations and price targets for U.S. Physical Therapy and AAC Holdings, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|U.S. Physical Therapy||0||2||2||0||2.50|
U.S. Physical Therapy currently has a consensus price target of $68.33, indicating a potential upside of 10.75%. AAC Holdings has a consensus price target of $18.75, indicating a potential upside of 116.26%. Given AAC Holdings’ stronger consensus rating and higher possible upside, analysts clearly believe AAC Holdings is more favorable than U.S. Physical Therapy.
Risk & Volatility
U.S. Physical Therapy has a beta of 1.06, meaning that its stock price is 6% more volatile than the S&P 500. Comparatively, AAC Holdings has a beta of 2.05, meaning that its stock price is 105% more volatile than the S&P 500.
This table compares U.S. Physical Therapy and AAC Holdings’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|U.S. Physical Therapy||5.65%||12.91%||7.01%|
U.S. Physical Therapy beats AAC Holdings on 12 of the 18 factors compared between the two stocks.
About U.S. Physical Therapy
U.S. Physical Therapy, Inc., through its subsidiaries, operates outpatient physical therapy clinics that provide pre-and post-operative care, and treatment for orthopedic-related disorders, sports-related injuries, preventative care, rehabilitation of injured workers and neurological-related injuries. The Company’s segment is made up of various clinics within partnerships. The Company primarily operates through subsidiary clinic partnerships, in which it owns a general partnership interest and a limited partnership interest, and the managing therapists of the clinics owns the remaining limited partnership interest in the clinics. The Company operates 562 physical therapy clinics in 42 states. There are approximately 380 clinics operated under Clinic Partnerships and over 100 operated as Company-owned Facilities. In addition to its owned clinics, it also manages physical therapy facilities for third parties, primarily physicians, with over 29 third-party facilities under management.
About AAC Holdings
AAC Holdings, Inc. is a provider of inpatient and outpatient substance abuse treatment services for individuals with drug and alcohol addiction. The Company performs drug testing and diagnostics laboratory services and provides physician services to its clients. As of June 30, 2016, the Company operated 12 residential substance abuse treatment facilities located throughout the United States, focused on delivering clinical care and treatment solutions across 1,139 beds, which includes 636 licensed detoxification beds, and 18 standalone outpatient centers. In addition, the Company focuses on expanding The Oxford Centre facility. As of June 30, 2016, the Company’s capacity at its Forterus treatment facility was 14 beds. The Company is engaged in deploying research-based treatment programs with structured curricula for detoxification, residential treatment, partial hospitalization and intensive outpatient care. The Company is also an Internet marketer in the addiction treatment industry.
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