Analyzing DaVita (NYSE:DVA) and The Pennant Group (NASDAQ:PNTG)

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

Valuation and Earnings

This table compares DaVita and The Pennant Group”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DaVita	$12.82 billion	0.74	$936.34 million	$10.17	13.04
The Pennant Group	$695.24 million	1.22	$22.56 million	$0.78	31.51

DaVita has higher revenue and earnings than The Pennant Group. DaVita 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
DaVita	6.35%	369.39%	4.62%
The Pennant Group	3.36%	9.85%	4.04%

Risk & Volatility

DaVita has a beta of 1.13, indicating that its share price is 13% more 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.

Institutional and Insider Ownership

90.1% of DaVita shares are held by institutional investors. Comparatively, 85.9% of The Pennant Group shares are held by institutional investors. 1.5% of DaVita shares are held by insiders. Comparatively, 5.4% of The Pennant Group shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of recent ratings and target prices for DaVita and The Pennant Group, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DaVita	1	3	0	0	1.75
The Pennant Group	0	2	3	0	2.60

DaVita currently has a consensus price target of $158.00, indicating a potential upside of 19.18%. The Pennant Group has a consensus price target of $34.40, indicating a potential upside of 39.95%. Given The Pennant Group’s stronger consensus rating and higher possible upside, analysts clearly believe The Pennant Group is more favorable than DaVita.

About DaVita

DaVita Inc. provides kidney dialysis services for patients suffering from chronic kidney failure in the United States. The company operates kidney dialysis centers and provides related lab services in outpatient dialysis centers. It also offers outpatient, hospital inpatient, and home-based hemodialysis services; operates clinical laboratories that provide routine laboratory tests for dialysis and other physician-prescribed laboratory tests for ESRD patients; and management and administrative services to outpatient dialysis centers. In addition, the company offers integrated care and disease management services to patients in risk-based and other integrated care arrangements; clinical research programs; physician services; and comprehensive kidney care services. Further, it engages in the provision of acute inpatient dialysis services and related laboratory services; and transplant software business. The company was formerly known as DaVita HealthCare Partners Inc. and changed its name to DaVita Inc. in September 2016. DaVita Inc. was incorporated in 1994 and is headquartered in Denver, Colorado.

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.