AMERIGROUP (AGP) & U.S. Physical Therapy (USPH) Financial Survey

AMERIGROUP (NYSE: AGP) and U.S. Physical Therapy (NYSE:USPH) are both hospitals, clinics & primary care services companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, dividends, risk, institutional ownership, analyst recommendations, earnings and profitability.

Institutional and Insider Ownership

94.0% of U.S. Physical Therapy shares are held by institutional investors. 3.1% of U.S. Physical Therapy shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares AMERIGROUP and U.S. Physical Therapy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AMERIGROUP N/A N/A N/A
U.S. Physical Therapy 5.29% 13.37% 6.63%

Valuation & Earnings

This table compares AMERIGROUP and U.S. Physical Therapy’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
AMERIGROUP N/A N/A N/A $2.56 4.45
U.S. Physical Therapy $356.55 million 2.42 $20.55 million $1.66 41.27

U.S. Physical Therapy has higher revenue and earnings than AMERIGROUP. AMERIGROUP 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.

Volatility & Risk

AMERIGROUP has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500. Comparatively, U.S. Physical Therapy has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500.

Dividends

U.S. Physical Therapy pays an annual dividend of $0.80 per share and has a dividend yield of 1.2%. AMERIGROUP does not pay a dividend. U.S. Physical Therapy pays out 48.2% of its earnings in the form of a dividend. U.S. Physical Therapy has raised its dividend for 6 consecutive years.

Analyst Recommendations

This is a summary of recent recommendations and price targets for AMERIGROUP and U.S. Physical Therapy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AMERIGROUP 0 0 0 0 N/A
U.S. Physical Therapy 0 2 2 0 2.50

U.S. Physical Therapy has a consensus price target of $70.25, indicating a potential upside of 2.55%. Given U.S. Physical Therapy’s higher probable upside, analysts clearly believe U.S. Physical Therapy is more favorable than AMERIGROUP.

Summary

U.S. Physical Therapy beats AMERIGROUP on 10 of the 13 factors compared between the two stocks.

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.

U.S. Physical Therapy Company Profile

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.

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