Analyzing China Cord Blood (CO) and The Providence Service (PRSC)

China Cord Blood (NYSE: CO) and The Providence Service (NASDAQ:PRSC) are both small-cap medical companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, earnings, analyst recommendations, institutional ownership, dividends, profitability and risk.

Profitability

This table compares China Cord Blood and The Providence Service’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
China Cord Blood 26.79% 9.68% 4.36%
The Providence Service 4.91% 6.29% 2.63%

Earnings & Valuation

This table compares China Cord Blood and The Providence Service’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
China Cord Blood $110.41 million 9.95 $18.33 million $0.35 26.03
The Providence Service $1.58 billion 0.54 $91.92 million $5.58 11.53

The Providence Service has higher revenue and earnings than China Cord Blood. The Providence Service is trading at a lower price-to-earnings ratio than China Cord Blood, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for China Cord Blood and The Providence Service, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
China Cord Blood 0 0 0 0 N/A
The Providence Service 0 1 1 0 2.50

The Providence Service has a consensus target price of $67.00, suggesting a potential upside of 4.13%. Given The Providence Service’s higher possible upside, analysts plainly believe The Providence Service is more favorable than China Cord Blood.

Insider and Institutional Ownership

9.1% of China Cord Blood shares are owned by institutional investors. Comparatively, 95.3% of The Providence Service shares are owned by institutional investors. 18.9% of The Providence Service shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility and Risk

China Cord Blood has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, The Providence Service has a beta of 0.89, suggesting that its share price is 11% less volatile than the S&P 500.

Summary

The Providence Service beats China Cord Blood on 9 of the 13 factors compared between the two stocks.

About China Cord Blood

China Cord Blood Corporation is a provider of cord blood banking services in China. The Company and its subsidiaries are principally engaged in the provision of umbilical cord blood storage and ancillary services in the People’s Republic of China. It provides cord blood testing, processing and storage services under the direction of subscribers for a cord blood processing fee and a storage fee. It also tests, processes and stores donated cord blood, and provides matching services to the public for a fee. The Company provides cord blood processing and storage services for expectant parents interested in capturing the opportunities made available by evolving medical treatments and technologies, such as cord blood transplants. It also preserves cord blood units donated by the public; provides matching services on such donated units, and delivers matching units to patients in need of transplants. As of March 31, 2016, the Company had three operating cord blood banks.

About The Providence Service

The Providence Service Corporation (Providence) is a holding company. The Company, through its subsidiaries, is engaged in the provision of healthcare and workforce development services for public and private sector entities. The Company’s segments include Non-Emergency Transportation Services (NET Services), Workforce Development Services (WD Services) and Matrix Investment. NET Services segment includes nationwide provider of non-emergency medical transportation programs for state governments and managed care organizations. WD Services segment is a global provider of employment preparation and placement and legal offender rehabilitation services to eligible participants of government sponsored programs. Matrix Investment segment includes minority interest in nationwide provider of in-home care optimization and management solutions, including comprehensive health assessments (CHAs), to members of managed care organizations, accounted for as an equity method investment.

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