Critical Comparison: Community Health Systems (NYSE:CYH) versus Ambu A/S (OTCMKTS:AMBBY)

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

Profitability

This table compares Community Health Systems and Ambu A/S’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Community Health Systems	-3.85%	N/A	-0.87%
Ambu A/S	6.21%	6.31%	4.97%

Insider and Institutional Ownership

85.0% of Community Health Systems shares are owned by institutional investors. 11.7% of Community Health Systems shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Community Health Systems has a beta of 2.06, suggesting that its stock price is 106% more volatile than the S&P 500. Comparatively, Ambu A/S has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and price targets for Community Health Systems and Ambu A/S, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Community Health Systems	2	4	2	0	2.00
Ambu A/S	0	0	0	1	4.00

Community Health Systems currently has a consensus price target of $4.17, suggesting a potential upside of 25.69%. Given Community Health Systems’ higher probable upside, research analysts clearly believe Community Health Systems is more favorable than Ambu A/S.

Earnings and Valuation

This table compares Community Health Systems and Ambu A/S”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Community Health Systems	$12.63 billion	0.04	-$516.00 million	($3.68)	-0.90
Ambu A/S	$783.76 million	4.63	$34.17 million	$0.19	81.32

Ambu A/S has lower revenue, but higher earnings than Community Health Systems. Community Health Systems 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.

Summary

Ambu A/S beats Community Health Systems on 9 of the 15 factors compared between the two stocks.

About Community Health Systems

Community Health Systems, Inc. owns, leases, and operates general acute care hospitals in the United States. It offers general acute care, emergency room, general and specialty surgery, critical care, internal medicine, obstetrics, diagnostic, psychiatric, and rehabilitation services, as well as skilled nursing and home care services. The company also provides outpatient services at primary care practices, urgent care centers, free-standing emergency departments, ambulatory surgery centers, imaging and diagnostic centers, and direct-to-consumer virtual health visits. The company was incorporated in 1996 and is headquartered in Franklin, Tennessee.

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.