West Pharmaceutical Services (NYSE:WST) and Merit Medical Systems (NASDAQ:MMSI) are both medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, profitability, valuation, risk, dividends and analyst recommendations.
Profitability
This table compares West Pharmaceutical Services and Merit Medical Systems' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
West Pharmaceutical Services | 14.69% | 19.01% | 12.78% |
Merit Medical Systems | -3.05% | 9.02% | 4.91% |
Analyst Recommendations
This is a summary of current recommendations for West Pharmaceutical Services and Merit Medical Systems, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
West Pharmaceutical Services | 0 | 1 | 2 | 0 | 2.67 |
Merit Medical Systems | 0 | 1 | 7 | 0 | 2.88 |
West Pharmaceutical Services presently has a consensus price target of $310.00, indicating a potential upside of 2.12%. Merit Medical Systems has a consensus price target of $64.3750, indicating a potential upside of 4.13%. Given Merit Medical Systems' stronger consensus rating and higher probable upside, analysts clearly believe Merit Medical Systems is more favorable than West Pharmaceutical Services.
Risk and Volatility
West Pharmaceutical Services has a beta of 1.13, meaning that its stock price is 13% more volatile than the S&P 500. Comparatively, Merit Medical Systems has a beta of 1.21, meaning that its stock price is 21% more volatile than the S&P 500.
Institutional and Insider Ownership
92.6% of West Pharmaceutical Services shares are owned by institutional investors. Comparatively, 99.5% of Merit Medical Systems shares are owned by institutional investors. 1.6% of West Pharmaceutical Services shares are owned by company insiders. Comparatively, 4.7% of Merit Medical Systems shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Earnings & Valuation
This table compares West Pharmaceutical Services and Merit Medical Systems' top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
West Pharmaceutical Services | $1.84 billion | 12.17 | $241.70 million | $3.24 | 93.59 |
Merit Medical Systems | $994.85 million | 3.46 | $5.45 million | $1.46 | 42.36 |
West Pharmaceutical Services has higher revenue and earnings than Merit Medical Systems. Merit Medical Systems is trading at a lower price-to-earnings ratio than West Pharmaceutical Services, indicating that it is currently the more affordable of the two stocks.
Summary
West Pharmaceutical Services beats Merit Medical Systems on 8 of the 14 factors compared between the two stocks.