Reviewing U.S. Physical Therapy (NYSE:USPH) & Quest Diagnostics (NYSE:DGX)

Quest Diagnostics (NYSE:DGX) and U.S. Physical Therapy (NYSE:USPH) are both medical companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, risk and valuation.

Dividends

Quest Diagnostics pays an annual dividend of $3.20 per share and has a dividend yield of 1.7%. U.S. Physical Therapy pays an annual dividend of $1.80 per share and has a dividend yield of 2.4%. Quest Diagnostics pays out 37.6% of its earnings in the form of a dividend. U.S. Physical Therapy pays out 75.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Quest Diagnostics has increased its dividend for 14 consecutive years and U.S. Physical Therapy has increased its dividend for 6 consecutive years.

Valuation and Earnings

This table compares Quest Diagnostics and U.S. Physical Therapy”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Quest Diagnostics	$10.85 billion	1.95	$871.00 million	$8.52	22.27
U.S. Physical Therapy	$758.71 million	1.49	$31.42 million	$2.38	31.25

Quest Diagnostics has higher revenue and earnings than U.S. Physical Therapy. Quest Diagnostics is trading at a lower price-to-earnings ratio than U.S. Physical Therapy, indicating that it is currently the more affordable of the two stocks.

Insider & Institutional Ownership

88.1% of Quest Diagnostics shares are owned by institutional investors. 8.2% of Quest Diagnostics shares are owned by company insiders. Comparatively, 2.0% of U.S. Physical Therapy shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Volatility and Risk

Quest Diagnostics has a beta of 0.58, suggesting that its stock price is 42% less volatile than the S&P 500. Comparatively, U.S. Physical Therapy has a beta of 1.47, suggesting that its stock price is 47% more volatile than the S&P 500.

Profitability

This table compares Quest Diagnostics and U.S. Physical Therapy’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Quest Diagnostics	8.91%	15.47%	6.84%
U.S. Physical Therapy	5.05%	8.78%	3.81%

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Quest Diagnostics and U.S. Physical Therapy, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Quest Diagnostics	0	10	8	1	2.53
U.S. Physical Therapy	0	3	4	1	2.75

Quest Diagnostics currently has a consensus target price of $196.31, suggesting a potential upside of 3.45%. U.S. Physical Therapy has a consensus target price of $107.75, suggesting a potential upside of 44.89%. Given U.S. Physical Therapy’s stronger consensus rating and higher possible upside, analysts clearly believe U.S. Physical Therapy is more favorable than Quest Diagnostics.

Summary

Quest Diagnostics beats U.S. Physical Therapy on 12 of the 17 factors compared between the two stocks.

About Quest Diagnostics

Quest Diagnostics Incorporated provides diagnostic testing and services in the United States and internationally. The company develops and delivers diagnostic information services, such as routine, non-routine and advanced clinical testing, anatomic pathology testing, and other diagnostic information services. It offers diagnostic information services primarily under the Quest Diagnostics brand, as well as under the AmeriPath, Dermpath Diagnostics, ExamOne, and Quanum brands to physicians, hospitals, patients and consumers, health plans, government agencies, employers, retailers, pharmaceutical companies and insurers, and accountable care organizations through a network of laboratories, patient service centers, phlebotomists in physician offices, call centers and mobile phlebotomists, nurses, and other health and wellness professionals. The company also provides risk assessment services for the life insurance industry; and healthcare organizations and clinicians information technology solutions. Quest Diagnostics Incorporated was founded in 1967 and is headquartered in Secaucus, New Jersey.

About U.S. Physical Therapy

U.S. Physical Therapy, Inc. operates outpatient physical therapy clinics. The company operates through Physical Therapy Operations and Industrial Injury Prevention Services segments. The company provides pre-and post-operative care and treatment for orthopedic-related disorders, sports-related injuries, preventative care, rehabilitation of injured workers, and neurological-related injuries. It offers industrial injury prevention services, including onsite injury prevention and rehabilitation, performance optimization, post-offer employment testing, functional capacity evaluations, and ergonomic assessments through physical therapists and specialized certified athletic trainers for Fortune 500 companies, and other clients comprising insurers and their contractors. U.S. Physical Therapy, Inc. was founded in 1990 and is based in Houston, Texas.