Critical Survey: Ambu A/S (OTCMKTS:AMBBY) versus Universal Health Services (NYSE:UHS)

Ambu A/S (OTCMKTS:AMBBY) and Universal Health Services (NYSE:UHS) are both medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their profitability, risk, institutional ownership, valuation, dividends, earnings and analyst recommendations.

Dividends

Ambu A/S pays an annual dividend of $0.03 per share and has a dividend yield of 0.2%. Universal Health Services pays an annual dividend of $0.80 per share and has a dividend yield of 0.4%. Ambu A/S pays out 15.8% of its earnings in the form of a dividend. Universal Health Services pays out 4.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Universal Health Services is clearly the better dividend stock, given its higher yield and lower payout ratio.

Valuation and Earnings

This table compares Ambu A/S and Universal Health Services”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ambu A/S	$783.76 million	4.66	$34.17 million	$0.19	81.84
Universal Health Services	$15.83 billion	0.73	$1.14 billion	$17.82	9.98

Universal Health Services has higher revenue and earnings than Ambu A/S. Universal Health Services is trading at a lower price-to-earnings ratio than Ambu A/S, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Ambu A/S and Universal Health Services, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ambu A/S	0	0	0	1	4.00
Universal Health Services	0	9	6	0	2.40

Universal Health Services has a consensus price target of $224.77, indicating a potential upside of 26.43%. Given Universal Health Services’ higher probable upside, analysts plainly believe Universal Health Services is more favorable than Ambu A/S.

Insider & Institutional Ownership

86.1% of Universal Health Services shares are held by institutional investors. 16.4% of Universal Health Services shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Ambu A/S and Universal Health Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ambu A/S	6.21%	6.31%	4.97%
Universal Health Services	7.44%	17.79%	8.27%

Volatility & Risk

Ambu A/S has a beta of 1, meaning that its stock price has a similar volatility profile to the S&P 500.Comparatively, Universal Health Services has a beta of 1.31, meaning that its stock price is 31% more volatile than the S&P 500.

Summary

Universal Health Services beats Ambu A/S on 13 of the 17 factors compared between the two stocks.

About Ambu A/S

Ambu A/S develops, produces, and sells medical devices to hospitals, clinics, and rescue services worldwide. The company offers anaesthesia, and patient monitoring and diagnostics products. The company also offers endoscopy products, such as bronchoscopes, rhinolaryngoscopes, duodenoscopes, cystoscopes, and display units; and neurology products, including EEG and EMG electrodes, EMG guided injections, and intraoperative monitoring products. It also provides cardiology products consisting of airway management and anaesthesia products, such as bronchoscopes, video laryngoscopes, double and single lumen tubes, endobronchial blockers, laryngeal and face masks, breathing bags, and resuscitators. In addition, the company offers extrication collars, CPR breathing barriers, video laryngoscopes, and training manikins. The company was founded in 1937 and is headquartered in Ballerup, Denmark.

About Universal Health Services

Universal Health Services, Inc., through its subsidiaries, owns and operates acute care hospitals, and outpatient and behavioral health care facilities. It operates through Acute Care Hospital Services and Behavioral Health Care Services segments. The company's hospitals offer general and specialty surgery, internal medicine, obstetrics, emergency room care, radiology, oncology, diagnostic and coronary care, pediatric services, pharmacy services, and/or behavioral health services. It also provides commercial health insurance services; and various management services, which include central purchasing, information, finance and control systems, facilities planning, physician recruitment, administrative personnel management, marketing, and public relations services. Universal Health Services, Inc. founded in 1978 and is headquartered in King of Prussia, Pennsylvania.