Analyzing Surgery Partners (NASDAQ:SGRY) and Alignment Healthcare (NASDAQ:ALHC)

Surgery Partners (NASDAQ:SGRY) and Alignment Healthcare (NASDAQ:ALHC) are both healthcare companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, earnings, risk, valuation, analyst recommendations, profitability and institutional ownership.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Surgery Partners and Alignment Healthcare, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Surgery Partners	1	8	3	0	2.17
Alignment Healthcare	1	6	6	0	2.38

Surgery Partners currently has a consensus target price of $20.14, indicating a potential downside of 13.21%. Alignment Healthcare has a consensus target price of $14.00, indicating a potential upside of 90.74%. Given Alignment Healthcare’s stronger consensus rating and higher possible upside, analysts plainly believe Alignment Healthcare is more favorable than Surgery Partners.

Earnings & Valuation

This table compares Surgery Partners and Alignment Healthcare”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Surgery Partners	$3.31 billion	0.92	-$77.90 million	($0.70)	-33.14
Alignment Healthcare	$3.95 billion	0.39	-$720,000.00	$0.13	56.46

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

Profitability

This table compares Surgery Partners and Alignment Healthcare’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Surgery Partners	-2.63%	0.88%	0.34%
Alignment Healthcare	0.59%	12.46%	2.36%

Risk and Volatility

Surgery Partners has a beta of 1.85, meaning that its share price is 85% more volatile than the S&P 500. Comparatively, Alignment Healthcare has a beta of 1.07, meaning that its share price is 7% more volatile than the S&P 500.

Institutional and Insider Ownership

86.2% of Alignment Healthcare shares are owned by institutional investors. 2.0% of Surgery Partners shares are owned by insiders. Comparatively, 5.2% of Alignment Healthcare shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Alignment Healthcare beats Surgery Partners on 11 of the 14 factors compared between the two stocks.

About Surgery Partners

Surgery Partners, Inc., together with its subsidiaries, owns and operates a network of surgical facilities and ancillary services in the United States. The company provides ambulatory surgery centers and surgical hospitals that offer non-emergency surgical procedures in various specialties, including orthopedics and pain management, ophthalmology, gastroenterology, and general surgery. It offers diagnostic imaging, laboratory, obstetrics, oncology, pharmacy, physical therapy, and wound care; and ancillary services, including multi-specialty physician practices, urgent care facilities, and anesthesia services. In addition, it offers single- and multi-specialty facilities. Surgery Partners, Inc. was founded in 2004 and is headquartered in Brentwood, Tennessee.

About Alignment Healthcare

Alignment Healthcare, Inc., a tech-enabled Medicare advantage company, operates consumer-centric health care platform for seniors in the United States. It provides customized health care designed to meet the needs of a diverse array of seniors through its Medicare advantage plans. The company was founded in 2013 and is based in Orange, California.