Financial Analysis: National Research (NASDAQ:NRC) versus PRA Health Sciences (NASDAQ:PRAH)

National Research (NASDAQ:NRC) and PRA Health Sciences (NASDAQ:PRAH) are both business services companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, earnings, valuation, analyst recommendations, institutional ownership, profitability and dividends.

Analyst Ratings

This is a summary of current recommendations and price targets for National Research and PRA Health Sciences, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
National Research 0 1 0 0 2.00
PRA Health Sciences 0 4 5 0 2.56

PRA Health Sciences has a consensus target price of $116.75, indicating a potential upside of 7.30%. Given PRA Health Sciences’ stronger consensus rating and higher probable upside, analysts clearly believe PRA Health Sciences is more favorable than National Research.

Volatility & Risk

National Research has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500. Comparatively, PRA Health Sciences has a beta of 1.11, indicating that its share price is 11% more volatile than the S&P 500.

Dividends

National Research pays an annual dividend of $0.76 per share and has a dividend yield of 1.2%. PRA Health Sciences does not pay a dividend. National Research pays out 73.1% of its earnings in the form of a dividend.

Institutional & Insider Ownership

39.7% of National Research shares are held by institutional investors. Comparatively, 98.5% of PRA Health Sciences shares are held by institutional investors. 4.5% of National Research shares are held by company insiders. Comparatively, 1.0% of PRA Health Sciences shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares National Research and PRA Health Sciences’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
National Research $119.69 million 13.43 $30.05 million $1.04 62.03
PRA Health Sciences $2.87 billion 2.40 $153.90 million $3.93 27.69

PRA Health Sciences has higher revenue and earnings than National Research. PRA Health Sciences is trading at a lower price-to-earnings ratio than National Research, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares National Research and PRA Health Sciences’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
National Research 25.01% 130.25% 29.69%
PRA Health Sciences 8.00% 27.73% 8.74%

Summary

PRA Health Sciences beats National Research on 9 of the 16 factors compared between the two stocks.

About National Research

National Research Corporation (NRC) is a provider of analytics and insights that facilitate revenue growth, patient, employee and customer retention and patient engagement for healthcare providers, payers and other healthcare organizations. The Company’s portfolio of subscription-based solutions provides information and analysis to healthcare organizations and payers across a range of mission-critical, constituent-related elements, including patient experience and satisfaction, community population health risks, workforce engagement, community perceptions, and physician engagement. The Company’s clients range from acute care hospitals and post-acute providers, such as home health, long term care and hospice, to numerous payer organizations. The Company derives its revenue from its annually renewable services, which include performance measurement and improvement services, healthcare analytics and governance education services.

About PRA Health Sciences

PRA Health Sciences, Inc., a contract research organization, provides outsourced clinical development and data solution services to the biotechnology and pharmaceutical industries worldwide. The company operates in two segments, Clinical Research and Data Solutions. The Clinical Research segment offers product registration services, including clinical trial management, project management, regulatory affairs, therapeutic expertise, clinical operations, data and programming, safety and risk management, biostatistics and medical writing, quality assurance, and late phase services. It also provides strategic solutions, such as embedded, functional services provider, staff augmentation, and custom-built development solutions, as well as commercialization services; and early development services for Phase I and Phase IIa studies, and bioanalytical analysis. The Data Solutions segment offers data, analytics, technology, and consulting solutions to the life sciences market. Its services include market intelligence services, such as targeting and compensation, and pharmaceutical audit suite services; consulting and services comprising brand analytics, managed markets, commercial effectiveness, and scientific studies/clinical hubs; and technology-enabled products and services. PRA Health Sciences, Inc. conducts clinical trials in the areas of pharmaceutical development, including oncology, immunology, central nervous system, inflammation, respiratory, cardio metabolic, and infectious diseases. The company was formerly known as PRA Global Holdings, Inc. and changed its name to PRA Health Sciences, Inc. in July 2014. PRA Health Sciences, Inc. was founded in 1976 and is headquartered in Raleigh, North Carolina.

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