Acadia Healthcare (NASDAQ:ACHC – Get Free Report) and Community Health Systems (NYSE:CYH – Get Free Report) are both medical companies, but which is the superior business? We will contrast the two companies based on the strength of their analyst recommendations, risk, profitability, earnings, institutional ownership, valuation and dividends.
Insider and Institutional Ownership
85.0% of Community Health Systems shares are held by institutional investors. 1.3% of Acadia Healthcare shares are held by company insiders. Comparatively, 11.7% of Community Health Systems shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
Volatility & Risk
Acadia Healthcare has a beta of 0.93, meaning that its stock price is 7% less volatile than the S&P 500. Comparatively, Community Health Systems has a beta of 2.06, meaning that its stock price is 106% more volatile than the S&P 500.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Acadia Healthcare | $3.15 billion | 0.67 | $255.61 million | $2.03 | 11.22 |
| Community Health Systems | $12.63 billion | 0.04 | -$516.00 million | ($3.68) | -0.99 |
Acadia Healthcare has higher earnings, but lower revenue than Community Health Systems. Community Health Systems 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 breakdown of recent ratings and target prices for Acadia Healthcare and Community Health Systems, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Acadia Healthcare | 0 | 4 | 6 | 0 | 2.60 |
| Community Health Systems | 2 | 4 | 2 | 0 | 2.00 |
Acadia Healthcare currently has a consensus price target of $47.94, suggesting a potential upside of 110.56%. Community Health Systems has a consensus price target of $4.38, suggesting a potential upside of 19.63%. Given Acadia Healthcare’s stronger consensus rating and higher probable upside, research analysts plainly believe Acadia Healthcare is more favorable than Community Health Systems.
Profitability
This table compares Acadia Healthcare and Community Health Systems’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Acadia Healthcare | 5.94% | 8.72% | 4.46% |
| Community Health Systems | -3.85% | N/A | -0.87% |
Summary
Acadia Healthcare beats Community Health Systems on 10 of the 14 factors compared between the two stocks.
About Acadia Healthcare
Acadia Healthcare Company, Inc. provides behavioral healthcare services in the United States and Puerto Rico. The company develops and operates acute inpatient psychiatric facilities, specialty treatment facilities comprising residential recovery facilities and eating disorder facilities, comprehensive treatment centers, and residential treatment centers, as well as facilities offering outpatient behavioral healthcare services for the behavioral healthcare and recovery needs of communities. Acadia Healthcare Company, Inc. was founded in 2005 and is headquartered in Franklin, Tennessee.
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.
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