Critical Analysis: Oscar Health (NYSE:OSCR) and Select Medical (NYSE:SEM)

Select Medical (NYSE:SEM) and Oscar Health (NYSE:OSCR) are both mid-cap healthcare companies, but which is the better stock? We will contrast the two businesses based on the strength of their valuation, risk, earnings, institutional ownership, analyst recommendations, profitability and dividends.

Institutional and Insider Ownership

89.5% of Select Medical shares are owned by institutional investors. Comparatively, 75.7% of Oscar Health shares are owned by institutional investors. 16.0% of Select Medical shares are owned by insiders. Comparatively, 22.6% of Oscar Health shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for Select Medical and Oscar Health, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Select Medical	0	6	1	0	2.14
Oscar Health	1	7	3	1	2.33

Select Medical currently has a consensus target price of $15.50, suggesting a potential downside of 6.12%. Oscar Health has a consensus target price of $22.00, suggesting a potential downside of 29.76%. Given Select Medical’s higher probable upside, equities analysts plainly believe Select Medical is more favorable than Oscar Health.

Volatility and Risk

Select Medical has a beta of 1.01, suggesting that its stock price is 1% more volatile than the S&P 500. Comparatively, Oscar Health has a beta of 2.34, suggesting that its stock price is 134% more volatile than the S&P 500.

Valuation and Earnings

This table compares Select Medical and Oscar Health”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Select Medical	$5.52 billion	0.37	$146.22 million	$1.06	15.58
Oscar Health	$13.30 billion	0.71	-$443.15 million	($0.59)	-53.09

Select Medical has higher earnings, but lower revenue than Oscar Health. Oscar Health is trading at a lower price-to-earnings ratio than Select Medical, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Select Medical and Oscar Health’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Select Medical	2.42%	6.62%	2.30%
Oscar Health	-0.30%	-3.26%	-0.57%

Summary

Select Medical beats Oscar Health on 8 of the 15 factors compared between the two stocks.

About Select Medical

Select Medical Holdings Corporation, through its subsidiaries, operates critical illness recovery hospitals, rehabilitation hospitals, outpatient rehabilitation clinics, and occupational health centers in the United States. It operates in four segments: Critical Illness Recovery Hospital, Rehabilitation Hospital, Outpatient Rehabilitation, and Concentra. The Critical Illness Recovery Hospital segment consists of hospitals that provide services for heart failure, infectious disease, respiratory failure and pulmonary disease, surgery requiring prolonged recovery, renal disease, neurological events, and trauma. The Rehabilitation Hospital segment offers therapy and rehabilitation treatments, including rehabilitative services for brain and spinal cord injuries, strokes, amputations, neurological disorders, orthopedic conditions, pediatric congenital or acquired disabilities, and cancer. The Outpatient Rehabilitation segment operates rehabilitation clinics that provide physical, occupational, and speech rehabilitation programs and services; and specialized programs, such as functional programs for work related injuries, hand therapy, post-concussion rehabilitation, pediatric and cancer rehabilitation, and athletic training services. The Concentra segment operates and provides occupational health centers, telemedicine platforms, onsite clinics, and contract services at employer worksites that deliver occupational health services, consumer health, physical therapy, and preventive care. Select Medical Holdings Corporation was founded in 1996 and is headquartered in Mechanicsburg, Pennsylvania.

About Oscar Health

Oscar Health, Inc. operates as a health insurance in the United States. The company offers health plans in individual and small group markets, as well as +Oscar, a technology driven platform that help providers and payors directly enable their shift to value-based care. It also provides reinsurance products. The company was formerly known as Mulberry Health Inc. and changed its name to Oscar Health, Inc. in January 2021. Oscar Health, Inc. was incorporated in 2012 and is headquartered in New York, New York.