NasdaqGS:HCSG

Stock Analysis Report

Executive Summary

Healthcare Services Group, Inc. provides management, administrative, and operating services to the housekeeping, laundry, linen, facility maintenance, and dietary service departments of nursing homes, retirement complexes, rehabilitation centers, and hospitals in the United States.

Snowflake

Fundamentals

Excellent balance sheet established dividend payer.


Similar Companies

Share Price & News

How has Healthcare Services Group's share price performed over time and what events caused price changes?


Latest Share Price and Events

Stable Share Price: HCSG has not had significant price volatility in the past 3 months.


Market Performance


7 Day Return

-1.3%

HCSG

0.3%

US Commercial Services

0.7%

US Market


1 Year Return

-43.1%

HCSG

15.8%

US Commercial Services

13.7%

US Market

Return vs Industry: HCSG underperformed the US Commercial Services industry which returned 15.8% over the past year.

Return vs Market: HCSG underperformed the US Market which returned 13.7% over the past year.


Shareholder returns

HCSGIndustryMarket
7 Day-1.3%0.3%0.7%
30 Day-0.9%-0.8%4.7%
90 Day12.7%2.3%6.1%
1 Year-41.8%-43.1%20.1%15.8%16.2%13.7%
3 Year-30.7%-34.3%59.7%49.3%48.8%39.2%
5 Year-8.0%-16.4%99.8%79.3%62.5%44.5%

Price Volatility Vs. Market

How volatile is Healthcare Services Group's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Healthcare Services Group undervalued compared to its fair value and its price relative to the market?

31.8%

Undervalued compared to fair value


Share Price vs. Fair Value

Below Fair Value: HCSG ($25.06) is trading below our estimate of fair value ($36.76)

Significantly Below Fair Value: HCSG is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: HCSG is good value based on its PE Ratio (24.1x) compared to the Commercial Services industry average (25.8x).

PE vs Market: HCSG is poor value based on its PE Ratio (24.1x) compared to the US market (18.2x).


Price to Earnings Growth Ratio

PEG Ratio: HCSG is poor value based on its PEG Ratio (1.4x)


Price to Book Ratio

PB vs Industry: HCSG is overvalued based on its PB Ratio (4.1x) compared to the US Commercial Services industry average (1.9x).


Next Steps

Future Growth

How is Healthcare Services Group forecast to perform in the next 1 to 3 years based on estimates from 8 analysts?

17.6%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HCSG's forecast earnings growth (17.6% per year) is above the savings rate (2.7%).

Earnings vs Market: HCSG's earnings (17.6% per year) are forecast to grow faster than the US market (14.4% per year).

High Growth Earnings: HCSG's earnings are forecast to grow, but not significantly.

Revenue vs Market: HCSG's revenue (1.5% per year) is forecast to grow slower than the US market (7.3% per year).

High Growth Revenue: HCSG's revenue (1.5% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

Future ROE: HCSG's Return on Equity is forecast to be low in 3 years time (19.5%).


Next Steps

Past Performance

How has Healthcare Services Group performed over the past 5 years?

19.6%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HCSG has high quality earnings.

Growing Profit Margin: HCSG's current net profit margins (4.1%) are higher than last year (3.6%).


Past Earnings Growth Analysis

Earnings Trend: HCSG's earnings have grown by 19.6% per year over the past 5 years.

Accelerating Growth: HCSG's earnings growth over the past year (7%) is below its 5-year average (19.6% per year).

Earnings vs Industry: HCSG earnings growth over the past year (7%) exceeded the Commercial Services industry -3.1%.


Return on Equity

High ROE: HCSG's Return on Equity (17%) is considered low.


Return on Assets


Return on Capital Employed


Next Steps

Financial Health

How is Healthcare Services Group's financial position?


Financial Position Analysis

Short Term Liabilities: HCSG's short term assets ($531.9M) exceeds its short term liabilities ($160.0M)

Long Term Liabilities: HCSG's short term assets ($531.9M) exceeds its long term liabilities (111.1M)


Debt to Equity History and Analysis

Debt Level: HCSG's debt to equity ratio (2.2%) is considered satisfactory.

Reducing Debt: Insufficient data to determine if HCSG's debt to equity ratio has reduced over the past 5 years.

Debt Coverage: HCSG's debt is well covered by operating cash flow (857.4%).

Interest Coverage: HCSG's interest payments on its debt are well covered by EBIT (99.5x coverage).


Balance Sheet

Inventory Level: HCSG has a low level of unsold assets or inventory.

Debt Coverage by Assets: HCSG's debt is covered by short term assets (assets are 53.2x debt).


Next Steps

Dividend

What is Healthcare Services Group's current dividend yield, its reliability and sustainability?

3.19%

Current Dividend Yield


Upcoming Dividend Payment

Purchase Healthcare Services Group before the 'Buy Limit' to receive their next dividend payment.


Dividend Yield vs Market

company3.2%marketbottom25%1.4%markettop25%3.6%industryaverage1.6%forecastin3Years3.2%

Current dividend yield vs market & industry

Notable Dividend: HCSG's dividend (3.19%) is higher than the bottom 25% of dividend payers in the US market (1.42%).

High Dividend: HCSG's dividend (3.19%) is low compared to the top 25% of dividend payers in the US market (3.65%).


Stability and Growth of Payments

Stable Dividend: HCSG's dividends per share have been stable in the past 10 years.

Growing Dividend: HCSG's dividend payments have increased over the past 10 years.


Current Payout to Shareholders

Dividend Coverage: At its current payout ratio (76.2%), HCSG's payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HCSG's dividends in 3 years are forecast to be covered by earnings (62.4% payout ratio).


Next Steps

Management

What is the CEO of Healthcare Services Group's salary, the management and board of directors tenure and is there insider trading?

6.8yrs

Average management tenure


CEO

Theodore Wahl (45yo)

4.5yrs

Tenure

US$3,901,098

Compensation

Mr. Theodore Wahl, CPA has been the Chief Executive Officer of Healthcare Services Group Inc, since May 26, 2015 and its President since April 1, 2012. Mr. Wahl served as the Chief Operating Officer at Hea ...


CEO Compensation Analysis

Compensation vs Market: Theodore's total compensation ($USD3.90M) is about average for companies of similar size in the US market ($USD3.92M).

Compensation vs Earnings: Theodore's compensation has been consistent with company performance over the past year.


Management Age and Tenure

6.8yrs

Average Tenure

46yo

Average Age

Experienced Management: HCSG's management team is seasoned and experienced (6.8 years average tenure).


Board Age and Tenure

8.5yrs

Average Tenure

66yo

Average Age

Experienced Board: HCSG's board of directors are considered experienced (8.5 years average tenure).


Insider Trading

Insider Buying: HCSG insiders have only sold shares in the past 3 months.


Recent Insider Transactions

SellUS$204,51013 Sep 19
Robert Frome
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares8,500
Max PriceUS$24.06
SellUS$69,85611 Jun 19
Robert Frome
EntityIndividual
Role
Member of the Board of Directors
Independent Director
Shares2,094
Max PriceUS$33.36

Ownership Breakdown

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Management Team

  • Michael McBryan (54yo)

    Executive VP

    • Tenure: 8.5yrs
    • Compensation: US$1.44m
  • Bryan McCartney (58yo)

    Executive Vice President

    • Tenure: 7.6yrs
    • Compensation: US$1.26m
  • Theodore Wahl (45yo)

    President

    • Tenure: 4.5yrs
    • Compensation: US$3.90m
  • John Shea (47yo)

    Executive VP & CFO

    • Tenure: 7.6yrs
    • Compensation: US$1.08m
  • Jason Bundick (42yo)

    Executive VP

    • Tenure: 5.9yrs
    • Compensation: US$496.34k
  • Andrew Kush (41yo)

    Executive VP & Chief Administrative Officer

    • Tenure: 2.4yrs
    • Compensation: US$1.02m
  • Matthew McKee

    Chief Communications Officer

    • Tenure: 0yrs

Board Members

  • Daniel McCartney (67yo)

    Chairman Emeritus

    • Tenure: 2.5yrs
    • Compensation: US$42.61k
  • Michael McBryan (54yo)

    Executive VP

    • Tenure: 8.5yrs
    • Compensation: US$1.44m
  • John Briggs (69yo)

    Lead Independent Director

    • Tenure: 7.6yrs
    • Compensation: US$102.41k
  • Robert Frome (81yo)

    Independent Director

    • Tenure: 36.8yrs
    • Compensation: US$56.41k
  • Robert Moss (81yo)

    Independent Director

    • Tenure: 27.8yrs
    • Compensation: US$61.41k
  • Dino Ottaviano (71yo)

    Independent Director

    • Tenure: 12.8yrs
    • Compensation: US$61.41k
  • Theodore Wahl (45yo)

    President

    • Tenure: 4.5yrs
    • Compensation: US$3.90m
  • Diane Casey (65yo)

    Independent Director

    • Tenure: 8.5yrs
    • Compensation: US$57.41k
  • John McFadden (57yo)

    Independent Director

    • Tenure: 7.8yrs
    • Compensation: US$57.41k
  • Jude Visconto (45yo)

    Independent Chairman of the Board

    • Tenure: 2.5yrs
    • Compensation: US$96.41k

Company Information

Healthcare Services Group, Inc.'s company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Healthcare Services Group, Inc.
  • Ticker: HCSG
  • Exchange: NasdaqGS
  • Founded: 1976
  • Industry: Diversified Support Services
  • Sector: Commercial Services
  • Market Cap: US$1.857b
  • Shares outstanding: 74.12m
  • Website: https://www.hcsgcorp.com

Number of Employees


Location

  • Healthcare Services Group, Inc.
  • 3220 Tillman Drive
  • Suite 300
  • Bensalem
  • Pennsylvania
  • 19020
  • United States

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
HCSGNasdaqGS (Nasdaq Global Select)YesCommon SharesUSUSDNov 1983
HS1DB (Deutsche Boerse AG)YesCommon SharesDEEURNov 1983

Biography

Healthcare Services Group, Inc. provides management, administrative, and operating services to the housekeeping, laundry, linen, facility maintenance, and dietary service departments of nursing homes, reti ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/11/17 23:39
End of Day Share Price2019/11/15 00:00
Earnings2019/09/30
Annual Earnings2018/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.