Kindred Healthcare, Inc. (NYSE:KND) and Envision Healthcare Corporation (NYSE:EVHC) are both Healthcare companies that recently hit new low. Many investors are wondering what to do with these names trading at such extreme levels. To determine if one is a better investment than the other, we will compare the two across growth, profitability, risk, return, dividends, and valuation measures.
Kindred Healthcare, Inc. (NYSE:KND) operates in the Long-Term Care Facilities segment of the Healthcare sector. The company has grown sales at a 11.40% annual rate over the past five years, putting it in the high growth category. KND has a net profit margin of -8.40% and is less profitable than the average company in the Long-Term Care Facilities industry. In terms of efficiency, KND has an asset turnover ratio of 1.08. This figure represents the amount of revenue a company generates per dollar of assets. KND’s financial leverage ratio is 9.9, which indicates that the company’s asset base is primarily funded by debt. Company’s return on equity, which is really just the product of the company’s profit margin, asset turnover, and financial leverage ratios, is -91.10%, which is worse than the Long-Term Care Facilities industry average ROE.
Kindred Healthcare, Inc. (KND) pays out an annual dividend of 0.48 per share. At the current valuation, this equates to a dividend yield of 6.67%.Stock’s free cash flow yield, which represents the amount of cash available to investors before dividends, expressed as a percentage of the stock price, is -2.79. The average investment recommendation for KND, taken from a group of Wall Street Analysts, is 3.20, or a hold.
Over the past three months, Kindred Healthcare, Inc. insiders have been net buyers, dumping a net of -19,545 shares. This implies that insiders have been feeling relatively bearish about the outlook for KND. Insider activity and sentiment signals are important to monitor because they can shed light on how “risky” a stock is perceived to be at it’s current valuation. Knowing this, it makes sense to look at beta, a measure of market risk. KND has a beta of 1.19 and therefore an above average level of market volatility.
Envision Healthcare Corporation (NYSE:EVHC) operates in the Long-Term Care Facilities segment of the Healthcare sector. EVHC has increased sales at a 36.80% CAGR over the past five years, and is considered a high growth stock. The company has a net profit margin of -7.00% and is less profitable than the average Long-Term Care Facilities player. EVHC’s asset turnover ratio is 0.51 and the company has financial leverage of 1.52. EVHC’s return on equity of -7.80% is worse than the Long-Term Care Facilities industry average.
The average analyst recommendation for EVHC is 1.60, or a buy.
Envision Healthcare Corporation insiders have bought a net of 11,428 shares during the past three months, which implies that the company’s top executives have been feeling bullish about the stock’s outlook. Finally, EVHC’s beta of 0.62 indicates that the stock has an above average level of market risk.
Kindred Healthcare, Inc. (NYSE:EVHC) scores higher than Envision Healthcare Corporation (NYSE:KND) on 8 of the 13 measures compared between the two companies. EVHC has the better fundamentals, scoring higher on growth, profitability, leverage and return metrics. EVHC has better insider activity and sentiment signals.