Critical Contrast: National HealthCare (NYSE:NHC) vs. The Ensign Group (NYSE:ENSG)

The Ensign Group (NASDAQ:ENSG) and National HealthCare (NYSE:NHC) are both medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their risk, dividends, earnings, profitability, analyst recommendations, institutional ownership and valuation.

Earnings & Valuation

This table compares The Ensign Group and National HealthCare’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
The Ensign Group $2.04 billion 1.53 $110.53 million $2.09 27.76
National HealthCare $996.38 million 0.98 $68.21 million N/A N/A

The Ensign Group has higher revenue and earnings than National HealthCare.

Insider and Institutional Ownership

80.7% of The Ensign Group shares are held by institutional investors. Comparatively, 46.8% of National HealthCare shares are held by institutional investors. 6.8% of The Ensign Group shares are held by company insiders. Comparatively, 13.1% of National HealthCare shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for The Ensign Group and National HealthCare, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
The Ensign Group 0 2 4 0 2.67
National HealthCare 0 0 0 0 N/A

The Ensign Group presently has a consensus target price of $51.50, indicating a potential downside of 11.24%. Given The Ensign Group’s higher probable upside, equities research analysts plainly believe The Ensign Group is more favorable than National HealthCare.

Dividends

The Ensign Group pays an annual dividend of $0.20 per share and has a dividend yield of 0.3%. National HealthCare pays an annual dividend of $2.08 per share and has a dividend yield of 3.3%. The Ensign Group pays out 9.6% of its earnings in the form of a dividend. The Ensign Group has raised its dividend for 1 consecutive years and National HealthCare has raised its dividend for 7 consecutive years. National HealthCare is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares The Ensign Group and National HealthCare’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
The Ensign Group 5.81% 20.42% 5.86%
National HealthCare 3.41% 7.76% 4.59%

Risk & Volatility

The Ensign Group has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500. Comparatively, National HealthCare has a beta of 0.28, suggesting that its share price is 72% less volatile than the S&P 500.

Summary

The Ensign Group beats National HealthCare on 10 of the 15 factors compared between the two stocks.

About The Ensign Group

The Ensign Group, Inc. provides health care services in the post-acute care continuum and other ancillary businesses. The company offers transitional and skilled services, which include short and long-term nursing care services for patients with chronic conditions, prolonged illness, and the elderly. It also provides standard services, such as room and board, special nutritional program, social, recreational, entertainment, and other services. In addition, the company offers senior living, as well as mobile diagnostics services; leases real estate properties; and provides other ancillary services consisting of digital x-ray, ultrasound, electrocardiogram, laboratory, sub-acute, and patient transportation services to people in their homes or at long-term care facilities. As of December 31, 2019, it operated 223 skilled nursing and senior living facilities in Arizona, California, Colorado, Idaho, Iowa, Kansas, Massachusetts, Nebraska, Nevada, South Carolina, Texas, Utah, Washington, and Wisconsin. The Ensign Group, Inc. was founded in 1999 and is based in San Juan Capistrano, California.

About National HealthCare

National HealthCare Corporation operates, manages, and provides services to skilled nursing facilities, assisted living facilities, independent living facilities, and home health care programs. Its skilled nursing facilities offer licensed therapy services, nutrition services, social services, activities, and housekeeping and laundry services, as well as medical services prescribed by physicians; and rehabilitative services, such as physical, speech, respiratory, and occupational therapy for patients recovering from strokes, heart attacks, orthopedic conditions, neurological illnesses, or other illnesses, injuries, or disabilities. The company's medical specialty units comprise memory care units and subacute nursing units that provide specialized care and programs for persons with Alzheimer's or related disorders; and assisted living centers offer personal care services and assistance with general activities of daily living, such as dressing, bathing, meal preparation, and medication management. It also owns, leases, and manages independent living facilities that provide specially designed residential units for the active and ambulatory elderly, as well as offers various ancillary services for its residents, including restaurants, activity rooms, and social areas. In addition, it provides health care programs that offer skilled services, such as infusion, wound care and physical, occupational, and speech therapies; operates pharmacies; offers management, accounting, financial, and insurance services; and leases its properties to third party operators. As of December 31, 2019, the company operated 75 skilled nursing facilities with 9,513 licensed beds; 25 assisted living facilities; 5 independent living facilities; 35 homecare programs; and 4 pharmacy locations. National HealthCare Corporation was founded in 1971 and is based in Murfreesboro, Tennessee.

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