Critical Review: Henry Schein (NASDAQ:HSIC) & Tenet Healthcare (NYSE:THC)

Tenet Healthcare (NYSE:THC) and Henry Schein (NASDAQ:HSIC) are both healthcare companies, but which is the better investment? We will compare the two companies based on the strength of their valuation, institutional ownership, profitability, earnings, dividends, risk and analyst recommendations.

Valuation & Earnings

This table compares Tenet Healthcare and Henry Schein”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tenet Healthcare	$21.31 billion	1.01	$1.41 billion	$25.93	10.31
Henry Schein	$13.18 billion	0.73	$398.00 million	$3.43	25.16

Tenet Healthcare has higher revenue and earnings than Henry Schein. Tenet Healthcare is trading at a lower price-to-earnings ratio than Henry Schein, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Tenet Healthcare has a beta of 1.2, indicating that its share price is 20% more volatile than the S&P 500. Comparatively, Henry Schein has a beta of 0.84, indicating that its share price is 16% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Tenet Healthcare and Henry Schein, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tenet Healthcare	0	3	18	0	2.86
Henry Schein	1	5	9	0	2.53

Tenet Healthcare currently has a consensus target price of $278.45, indicating a potential upside of 4.18%. Henry Schein has a consensus target price of $93.27, indicating a potential upside of 8.07%. Given Henry Schein’s higher probable upside, analysts clearly believe Henry Schein is more favorable than Tenet Healthcare.

Institutional & Insider Ownership

95.4% of Tenet Healthcare shares are held by institutional investors. Comparatively, 96.6% of Henry Schein shares are held by institutional investors. 1.0% of Tenet Healthcare shares are held by insiders. Comparatively, 0.9% of Henry Schein shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Tenet Healthcare and Henry Schein’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tenet Healthcare	10.27%	26.76%	5.55%
Henry Schein	2.96%	15.97%	5.56%

Summary

Tenet Healthcare beats Henry Schein on 10 of the 14 factors compared between the two stocks.

About Tenet Healthcare

Tenet Healthcare Corporation operates as a diversified healthcare services company in the United States. The company operates through two segments: Hospital Operations and Services, and Ambulatory Care. Its general hospitals offer acute care services, operating and recovery rooms, radiology and respiratory therapy services, clinical laboratories, and pharmacies. The company also provides intensive and critical care, and/or coronary care units; cardiovascular, digestive disease, neurosciences, musculoskeletal, and obstetrics services; outpatient services, including physical therapy; tertiary care services, such as cardiothoracic surgery, complex spinal surgery, neonatal intensive care, and neurosurgery services; quaternary care services in heart and kidney transplants; and limb salvaging vascular procedure, acute level 1 trauma, intravascular stroke care, minimally invasive cardiac valve replacement, imaging, surgical robotic, and telemedicine access services. In addition, it offers a range of procedures and services, such as orthopedics, total joint replacement, and spinal and other musculoskeletal procedures; gastroenterology; pain management; otolaryngology; ophthalmology; and urology. It operates hospitals, ambulatory surgery centers, imaging centers, surgical hospitals, off-campus emergency departments, and micro-hospitals. Tenet Healthcare Corporation was founded in 1967 and is headquartered in Dallas, Texas.

About Henry Schein

Henry Schein, Inc. provides health care products and services to dental practitioners, laboratories, physician practices, and ambulatory surgery centers, government, institutional health care clinics, and other alternate care clinics worldwide. It operates through two segments, Health Care Distribution, and Technology and Value-Added Services. The Health Care Distribution segment offers dental products, including infection-control products, handpieces, preventatives, impression materials, composites, anesthetics, teeth, dental implants, gypsum, acrylics, articulators, abrasives, dental chairs, delivery units and lights, X-ray supplies and equipment, personal protective equipment, and high-tech and digital restoration equipment, as well as equipment repair services. This segment also provides medical products, such as branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products, X-ray products, equipment, and vitamins. The Technology and Value-Added Services segment offers software, technology, and other value-added services that include practice management software systems for dental and medical practitioners; and value-added practice solutions comprising practice consultancy, education, revenue cycle management and financial services, e-services, practice technology, and network and hardware services, as well as consulting, and continuing education services. Henry Schein, Inc. was founded in 1932 and is headquartered in Melville, New York.