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 Analysis

Excellent balance sheet average 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

-9.5%

HCSG

-10.0%

US Commercial Services

-11.2%

US Market


1 Year Return

-27.0%

HCSG

6.5%

US Commercial Services

4.1%

US Market

Return vs Industry: HCSG underperformed the US Commercial Services industry which returned 6.5% over the past year.

Return vs Market: HCSG underperformed the US Market which returned 4.1% over the past year.


Shareholder returns

HCSGIndustryMarket
7 Day-9.5%-10.0%-11.2%
30 Day6.0%-8.6%-9.5%
90 Day9.5%-4.2%-5.4%
1 Year-24.8%-27.0%10.1%6.5%6.2%4.1%
3 Year-30.3%-34.7%45.2%35.7%30.3%21.9%
5 Year-3.9%-13.4%80.4%61.6%55.0%38.0%

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?

31.72x

Price to Earnings (PE) ratio


Share Price vs. Fair Value

Below Fair Value: HCSG ($27.55) is trading above our estimate of fair value ($23.51)

Significantly Below Fair Value: HCSG is trading above our estimate of fair value.


Price To Earnings Ratio

PE vs Industry: HCSG is poor value based on its PE Ratio (31.7x) compared to the Commercial Services industry average (27x).

PE vs Market: HCSG is poor value based on its PE Ratio (31.7x) compared to the US market (16.7x).


Price to Earnings Growth Ratio

PEG Ratio: HCSG is poor value based on its PEG Ratio (2x)


Price to Book Ratio

PB vs Industry: HCSG is overvalued based on its PB Ratio (4.4x) compared to the US Commercial Services industry average (1.8x).


Next Steps

Future Growth

How is Healthcare Services Group forecast to perform in the next 1 to 3 years based on estimates from 10 analysts?

16.2%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: HCSG's forecast earnings growth (16.2% per year) is above the savings rate (1.7%).

Earnings vs Market: HCSG's earnings (16.2% per year) are forecast to grow faster than the US market (12.9% per year).

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

Revenue vs Market: HCSG's revenue (2.9% per year) is forecast to grow slower than the US market (7.6% per year).

High Growth Revenue: HCSG's revenue (2.9% 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?

14.3%

Historical annual earnings growth


Earnings and Revenue History

Quality Earnings: HCSG has high quality earnings.

Growing Profit Margin: HCSG's current net profit margins (3.5%) are lower than last year (4.2%).


Past Earnings Growth Analysis

Earnings Trend: HCSG's earnings have grown by 14.3% per year over the past 5 years.

Accelerating Growth: HCSG's has had negative earnings growth over the past year, so it can't be compared to its 5-year average.

Earnings vs Industry: HCSG had negative earnings growth (-22.7%) over the past year, making it difficult to compare to the Commercial Services industry average (0.8%).


Return on Equity

High ROE: HCSG's Return on Equity (14%) is considered low.


Next Steps

Financial Health

How is Healthcare Services Group's financial position?


Financial Position Analysis

Short Term Liabilities: HCSG's short term assets ($515.7M) exceed its short term liabilities ($148.7M).

Long Term Liabilities: HCSG's short term assets ($515.7M) exceed its long term liabilities ($113.6M).


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 (935.8%).

Interest Coverage: HCSG earns more interest than it pays, so coverage of interest payments is not a concern.


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 51.6x debt).


Next Steps

Dividend

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

2.92%

Current Dividend Yield


Dividend Yield vs Market

Notable Dividend: HCSG's dividend (2.92%) is higher than the bottom 25% of dividend payers in the US market (1.62%).

High Dividend: HCSG's dividend (2.92%) is low compared to the top 25% of dividend payers in the US market (4.13%).


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: With its high payout ratio (91.8%), HCSG's dividend payments are not well covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: HCSG's dividends in 3 years are forecast to be covered by earnings (61.4% payout ratio).


Next Steps

Management

How experienced are the management team and are they aligned to shareholders interests?

7.8yrs

Average management tenure


CEO

Theodore Wahl (45yo)

4.8yrs

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 ($USD3.90M) is about average for companies of similar size in the US market ($USD3.94M).

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


Leadership Team

NamePositionTenureCompensationOwnership
Theodore Wahl
President4.8yrsUS$3.90m0.42% $9.3m
John Shea
Executive VP & CFO7.8yrsUS$1.08m0.023% $508.2k
Andrew Kush
Executive VP & COO0yrsUS$1.02m0.014% $312.0k
Michael McBryan
Executive VP8.8yrsUS$1.44m0.081% $1.8m
Jason Bundick
Executive VP6.2yrsUS$496.34k0.011% $241.8k
Matthew McKee
Chief Communications Officer0yrsno datano data
Bryan McCartney
Executive Vice President7.8yrsUS$1.26mno data

7.8yrs

Average Tenure

46yo

Average Age

Experienced Management: HCSG's management team is seasoned and experienced (7.8 years average tenure).


Board Members

NamePositionTenureCompensationOwnership
Theodore Wahl
President4.8yrsUS$3.90m0.42% $9.3m
Michael McBryan
Executive VP8.8yrsUS$1.44m0.081% $1.8m
Daniel McCartney
Chairman Emeritus2.8yrsUS$42.61kno data
John Briggs
Lead Independent Director7.8yrsUS$102.41k0.027% $603.5k
Robert Frome
Independent Director37.1yrsUS$56.41k0.013% $296.6k
Robert Moss
Independent Director28.1yrsUS$61.41kno data
Dino Ottaviano
Independent Director13.1yrsUS$61.41k0.00073% $16.3k
Diane Casey
Independent Director8.8yrsUS$57.41kno data
John McFadden
Independent Director8.1yrsUS$57.41kno data
Jude Visconto
Independent Chairman of the Board2.8yrsUS$96.41kno data

8.8yrs

Average Tenure

66yo

Average Age

Experienced Board: HCSG's board of directors are considered experienced (8.8 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Recent Insider Transactions

Ownership Breakdown

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


Top Shareholders

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$2.227b
  • Shares outstanding: 74.40m
  • 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, retirement complexes, rehabilitation centers, and hospitals in the United States. The company operates through two segments, Housekeeping and Dietary. The Housekeeping segment engages in the cleaning, disinfecting, and sanitizing of resident rooms and common areas of client’s facility, as well as laundering and processing of the bed linens, uniforms, resident personal clothing, and other assorted linen items utilized at a client’s facility. The Dietary segment provides food purchasing, meal preparation, and professional dietitian services, which include the development of menus that meet the dietary needs of residents. This segment also offers clinical consulting services to facilities. As of December 31, 2019, the company provided its services to approximately 3,000 facilities. Healthcare Services Group, Inc. was founded in 1976 and is headquartered in Bensalem, Pennsylvania. 


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2020/02/29 00:41
End of Day Share Price2020/02/28 00:00
Earnings2019/12/31
Annual Earnings2019/12/31


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.