Head-To-Head Analysis: Acadia Healthcare (ACHC) and Select Medical Holdings Corporation (SEM)

Acadia Healthcare (NASDAQ: ACHC) and Select Medical Holdings Corporation (NYSE:SEM) are both mid-cap medical companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.

Volatility and Risk

Acadia Healthcare has a beta of 1.07, indicating that its stock price is 7% more volatile than the S&P 500. Comparatively, Select Medical Holdings Corporation has a beta of 1.42, indicating that its stock price is 42% more volatile than the S&P 500.

Institutional and Insider Ownership

79.0% of Select Medical Holdings Corporation shares are held by institutional investors. 11.1% of Acadia Healthcare shares are held by company insiders. Comparatively, 19.9% of Select Medical Holdings Corporation shares are held by company 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 Acadia Healthcare and Select Medical Holdings Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Acadia Healthcare 0.30% 8.69% 3.16%
Select Medical Holdings Corporation 1.95% 9.61% 1.84%

Valuation & Earnings

This table compares Acadia Healthcare and Select Medical Holdings Corporation’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Acadia Healthcare $2.83 billion 1.34 $574.61 million $0.09 481.11
Select Medical Holdings Corporation $4.26 billion 0.56 $474.80 million $0.64 27.97

Acadia Healthcare has higher revenue, but lower earnings than Select Medical Holdings Corporation. Select Medical Holdings Corporation is trading at a lower price-to-earnings ratio than Acadia Healthcare, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations for Acadia Healthcare and Select Medical Holdings Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Acadia Healthcare 0 2 8 1 2.91
Select Medical Holdings Corporation 1 2 3 0 2.33

Acadia Healthcare presently has a consensus target price of $57.11, suggesting a potential upside of 31.90%. Select Medical Holdings Corporation has a consensus target price of $18.80, suggesting a potential upside of 5.03%. Given Acadia Healthcare’s stronger consensus rating and higher probable upside, research analysts clearly believe Acadia Healthcare is more favorable than Select Medical Holdings Corporation.

Summary

Select Medical Holdings Corporation beats Acadia Healthcare on 8 of the 15 factors compared between the two stocks.

About Acadia Healthcare

Acadia Healthcare Company, Inc. is a provider of behavioral healthcare services, with operations in the United States and the United Kingdom. The Company focuses on acquiring and developing behavioral healthcare facilities. The Company operates through two segments: U.S. Facilities and U.K. Facilities. The Company is engaged in operating acute inpatient psychiatric facilities, specialty treatment facilities, residential treatment centers and facilities providing outpatient behavioral healthcare services. As of December 31, 2016, the U.S. Facilities segment included 208 behavioral healthcare facilities with approximately 8,500 beds in 39 states and Puerto Rico, and the U.K. Facilities segment included 365 behavioral healthcare facilities with approximately 8,600 beds in the United Kingdom. As of December 31, 2016, the Company had operated 573 behavioral healthcare facilities with approximately 17,100 beds in 39 states, the United Kingdom and Puerto Rico.

About Select Medical Holdings Corporation

Select Medical Holdings Corporation is an operator of specialty hospitals, outpatient rehabilitation clinics and occupational medicine centers in the United States. The Company’s segments include specialty hospitals, outpatient rehabilitation, Concentra and Other. The specialty hospitals segment consists of hospitals designed to serve the needs of long term acute patients and hospitals designed to serve patients that require intensive medical rehabilitation care. The outpatient rehabilitation segment consists of clinics that provide physical, occupational, and speech rehabilitation services. The Concentra segment consists of medical centers and contract services provided at employer worksites and Department of Veterans Affairs community-based outpatient clinics (CBOCs) that deliver occupational medicine, physical therapy, veteran’s healthcare, and consumer health services. As of December 31, 2016, the Company had operations in 46 states and the District of Columbia.

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