MWI Veterinary Supply (NASDAQ: MWIV) and McKesson Corporation (NYSE:MCK) are both non-cyclical consumer goods & services companies, but which is the superior investment? We will compare the two businesses based on the strength of their profitability, institutional ownership, dividends, risk, analyst recommendations, earnings and valuation.

Insider and Institutional Ownership

86.6% of McKesson Corporation shares are held by institutional investors. 1.2% of McKesson Corporation shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and price targets for MWI Veterinary Supply and McKesson Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
MWI Veterinary Supply 0 0 0 0 N/A
McKesson Corporation 1 8 7 0 2.38

McKesson Corporation has a consensus price target of $169.50, indicating a potential upside of 14.81%. Given McKesson Corporation’s higher possible upside, analysts clearly believe McKesson Corporation is more favorable than MWI Veterinary Supply.

Valuation & Earnings

This table compares MWI Veterinary Supply and McKesson Corporation’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
MWI Veterinary Supply N/A N/A N/A N/A N/A
McKesson Corporation $199.85 billion 0.16 $3.94 billion $22.42 6.59

McKesson Corporation has higher revenue and earnings than MWI Veterinary Supply.

Profitability

This table compares MWI Veterinary Supply and McKesson Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
MWI Veterinary Supply 2.51% 15.74% 7.86%
McKesson Corporation 2.42% 25.76% 4.34%

Dividends

McKesson Corporation pays an annual dividend of $1.12 per share and has a dividend yield of 0.8%. MWI Veterinary Supply does not pay a dividend. McKesson Corporation pays out 5.0% of its earnings in the form of a dividend. MWI Veterinary Supply has increased its dividend for 4 consecutive years.

Summary

McKesson Corporation beats MWI Veterinary Supply on 7 of the 11 factors compared between the two stocks.

MWI Veterinary Supply Company Profile

MWI Veterinary Supply, Inc. (MWI) is a distributor of animal health products to veterinarians across the United States of America and United Kingdom. MWI sells both companion animal and production animal products including pharmaceuticals, vaccines, parasiticides, diagnostics, micro feed ingredients, supplies, pet food, capital equipment and nutritional products. MWI also offers customers a variety of value-added services, including its e-commerce platform, technology management systems, pharmacy fulfillment, inventory management system, equipment procurement consultation, special order fulfillment, educational seminars and pet cremation. As of September 30, 2014, the Company operates 23 distribution centers located across the United States and one distribution center in the United Kingdom.

McKesson Corporation Company Profile

McKesson Corporation (McKesson) is engaged in delivering pharmaceuticals, medical supplies and healthcare information technology. The Company operates through two segments: McKesson Distribution Solutions and Technology Solutions. The McKesson Distribution Solutions segment distributes drugs and equipment, and health and beauty care products across North America and internationally. The Distribution Solutions segment provides pharmaceutical solutions for biotech and pharmaceutical manufacturers, and practice management, technology, clinical support and business solutions to oncology and other specialty practices operating in the community setting. The Technology Solutions segment delivers clinical, patient care, financial, supply chain and strategic management software solutions, as well as connectivity, outsourcing and other services. Its McKesson Health Solutions portfolio includes ClarityQx, which is a payment technology.

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