Reviewing HealthEquity (NASDAQ:HQY) & Tenet Healthcare (NYSE:THC)

Tenet Healthcare (NYSE:THC) and HealthEquity (NASDAQ:HQY) are both healthcare companies, but which is the better business? We will compare the two companies based on the strength of their earnings, institutional ownership, risk, dividends, valuation, profitability and analyst recommendations.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Tenet Healthcare and HealthEquity, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tenet Healthcare	0	3	18	0	2.86
HealthEquity	1	0	11	1	2.92

Tenet Healthcare presently has a consensus target price of $278.45, indicating a potential upside of 4.18%. HealthEquity has a consensus target price of $112.20, indicating a potential upside of 21.92%. Given HealthEquity’s stronger consensus rating and higher probable upside, analysts plainly believe HealthEquity is more favorable than Tenet Healthcare.

Valuation & Earnings

This table compares Tenet Healthcare and HealthEquity”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tenet Healthcare	$21.31 billion	1.01	$1.41 billion	$25.93	10.31
HealthEquity	$1.31 billion	5.80	$215.20 million	$2.77	33.22

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

Profitability

This table compares Tenet Healthcare and HealthEquity’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tenet Healthcare	10.27%	26.76%	5.55%
HealthEquity	17.36%	15.33%	9.51%

Insider and Institutional Ownership

95.4% of Tenet Healthcare shares are held by institutional investors. Comparatively, 99.5% of HealthEquity shares are held by institutional investors. 1.0% of Tenet Healthcare shares are held by insiders. Comparatively, 1.6% of HealthEquity shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Tenet Healthcare has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500. Comparatively, HealthEquity has a beta of 0.24, suggesting that its share price is 76% less volatile than the S&P 500.

Summary

HealthEquity beats Tenet Healthcare on 9 of the 15 factors compared between the two stocks.

About Tenet Healthcare

Tenet Healthcare Corporation operates as a diversified healthcare services company in the United States. The company operates through two segments: Hospital Operations and Services, and Ambulatory Care. Its general hospitals offer acute care services, operating and recovery rooms, radiology and respiratory therapy services, clinical laboratories, and pharmacies. The company also provides intensive and critical care, and/or coronary care units; cardiovascular, digestive disease, neurosciences, musculoskeletal, and obstetrics services; outpatient services, including physical therapy; tertiary care services, such as cardiothoracic surgery, complex spinal surgery, neonatal intensive care, and neurosurgery services; quaternary care services in heart and kidney transplants; and limb salvaging vascular procedure, acute level 1 trauma, intravascular stroke care, minimally invasive cardiac valve replacement, imaging, surgical robotic, and telemedicine access services. In addition, it offers a range of procedures and services, such as orthopedics, total joint replacement, and spinal and other musculoskeletal procedures; gastroenterology; pain management; otolaryngology; ophthalmology; and urology. It operates hospitals, ambulatory surgery centers, imaging centers, surgical hospitals, off-campus emergency departments, and micro-hospitals. Tenet Healthcare Corporation was founded in 1967 and is headquartered in Dallas, Texas.

About HealthEquity

HealthEquity, Inc. provides technology-enabled services platforms to consumers and employers in the United States. The company offers cloud-based platforms for individuals to make health saving and spending decisions, pay healthcare bills, receive personalized benefit information, earn wellness incentives, grow their savings, and make investment choices; and health savings accounts. It also provides investment platform; and online-only automated investment advisory services through Advisor, a Web-based tool. In addition, the company offers flexible spending accounts; health reimbursement arrangements; and Consolidated Omnibus Budget Reconciliation Act continuation services, as well as administers pre-tax commuter benefit programs. It serves clients through a direct sales force; benefits brokers and advisors; and a network of health plans, benefits administrators, benefits brokers and consultants, and retirement plan record-keepers. HealthEquity, Inc. was incorporated in 2002 and is based in Draper, Utah.