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

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

Volatility and Risk

Alignment Healthcare has a beta of 1.17, suggesting that its share price is 17% more volatile than the S&P 500. Comparatively, Surgery Partners has a beta of 1.85, suggesting that its share price is 85% more volatile than the S&P 500.

Institutional & Insider Ownership

86.2% of Alignment Healthcare shares are owned by institutional investors. 6.6% of Alignment Healthcare shares are owned by company insiders. Comparatively, 2.7% of Surgery Partners shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Alignment Healthcare	-0.57%	-16.23%	-2.20%
Surgery Partners	-5.57%	2.51%	1.01%

Earnings and Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Alignment Healthcare	$2.70 billion	1.40	-$128.04 million	($0.12)	-157.93
Surgery Partners	$3.29 billion	0.65	-$168.10 million	($1.36)	-12.13

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Alignment Healthcare and Surgery Partners, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Alignment Healthcare	1	3	8	1	2.69
Surgery Partners	1	2	7	0	2.60

Alignment Healthcare presently has a consensus price target of $20.05, suggesting a potential upside of 5.80%. Surgery Partners has a consensus price target of $27.44, suggesting a potential upside of 66.33%. Given Surgery Partners’ higher possible upside, analysts plainly believe Surgery Partners is more favorable than Alignment Healthcare.

Summary

Alignment Healthcare beats Surgery Partners on 9 of the 15 factors compared between the two stocks.

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.

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.