Analyzing The Pennant Group (NASDAQ:PNTG) and Addus HomeCare (NASDAQ:ADUS)

Addus HomeCare (NASDAQ:ADUS) and The Pennant Group (NASDAQ:PNTG) are both medical companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitability, earnings, analyst recommendations, risk and valuation.

Risk & Volatility

Addus HomeCare has a beta of 0.85, indicating that its share price is 15% less volatile than the S&P 500. Comparatively, The Pennant Group has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500.

Earnings and Valuation

This table compares Addus HomeCare and The Pennant Group”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Addus HomeCare	$1.15 billion	1.87	$73.60 million	$4.53	25.90
The Pennant Group	$695.24 million	1.26	$22.56 million	$0.78	32.56

Addus HomeCare has higher revenue and earnings than The Pennant Group. Addus HomeCare is trading at a lower price-to-earnings ratio than The Pennant Group, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of current recommendations and price targets for Addus HomeCare and The Pennant Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Addus HomeCare	1	0	7	2	3.00
The Pennant Group	0	2	3	0	2.60

Addus HomeCare presently has a consensus target price of $138.89, suggesting a potential upside of 18.36%. The Pennant Group has a consensus target price of $34.40, suggesting a potential upside of 35.43%. Given The Pennant Group’s higher probable upside, analysts clearly believe The Pennant Group is more favorable than Addus HomeCare.

Insider & Institutional Ownership

95.4% of Addus HomeCare shares are held by institutional investors. Comparatively, 85.9% of The Pennant Group shares are held by institutional investors. 4.5% of Addus HomeCare shares are held by company insiders. Comparatively, 5.4% of The Pennant Group shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Addus HomeCare and The Pennant Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Addus HomeCare	6.51%	9.39%	6.86%
The Pennant Group	3.36%	9.85%	4.04%

Summary

Addus HomeCare beats The Pennant Group on 10 of the 15 factors compared between the two stocks.

About Addus HomeCare

Addus HomeCare Corporation, together with its subsidiaries, provides personal care services to elderly, chronically ill, disabled persons, and individuals who are at risk of hospitalization or institutionalization in the United States. The company operates through three segments: Personal Care, Hospice, and Home Health. The Personal Care segment provides non-medical assistance with activities of daily living. This segment offers services that include assistance with bathing, grooming, oral care, feeding and dressing, medication reminders, meal planning and preparation, housekeeping, and transportation services. The Hospice segment provides palliative nursing care, social work, spiritual counseling, homemaker, and bereavement counseling services for people who are terminally ill, as well as related services for their families. The Home Health segment offers skilled nursing and physical, occupational, and speech therapy for the individuals who requires assistance during an illness or after hospitalization. The company's payor clients include federal, state, and local governmental agencies; managed care organizations; commercial insurers; and private individuals. Addus HomeCare Corporation was founded in 1979 and is headquartered in Frisco, Texas.

About The Pennant Group

The Pennant Group, Inc. provides healthcare services in the United States. It operates in two segments, Home Health and Hospice Services, and Senior Living Services. The company offers home health services, including clinical services, such as nursing, speech, occupational and physical therapy, medical social work, and home health aide services; and hospice services comprising clinical care, education, and counseling services for the physical, spiritual, and psychosocial needs of terminally ill patients and their families. It also provides senior living services, such as residential accommodations, activities, meals, housekeeping, and assistance in the activities of daily living to seniors who are independent or who require some support. The company operates home health, hospice, and home care agencies, as well as senior living communities throughout Arizona, California, Colorado, Idaho, Montana, Nevada, Oklahoma, Oregon, Texas, Utah, Washington, Wisconsin, and Wyoming. The Pennant Group, Inc. was incorporated in 2019 and is headquartered in Eagle, Idaho.