Critical Comparison: West Pharmaceutical Services (WST) vs. Invacare Corporation (IVC)
West Pharmaceutical Services (NYSE: WST) and Invacare Corporation (NYSE:IVC) are both medical companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, institutional ownership, dividends, valuation, analyst recommendations, profitability and risk.
This is a breakdown of recent ratings and recommmendations for West Pharmaceutical Services and Invacare Corporation, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|West Pharmaceutical Services||0||1||3||0||2.75|
West Pharmaceutical Services presently has a consensus target price of $107.00, suggesting a potential upside of 13.89%. Invacare Corporation has a consensus target price of $14.50, suggesting a potential upside of 3.20%. Given West Pharmaceutical Services’ stronger consensus rating and higher possible upside, equities analysts clearly believe West Pharmaceutical Services is more favorable than Invacare Corporation.
This table compares West Pharmaceutical Services and Invacare Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|West Pharmaceutical Services||11.42%||14.02%||9.32%|
West Pharmaceutical Services pays an annual dividend of $0.52 per share and has a dividend yield of 0.6%. Invacare Corporation pays an annual dividend of $0.05 per share and has a dividend yield of 0.4%. West Pharmaceutical Services pays out 22.2% of its earnings in the form of a dividend. Invacare Corporation pays out -2.6% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Invacare Corporation has increased its dividend for 24 consecutive years.
Volatility and Risk
West Pharmaceutical Services has a beta of 1.12, indicating that its share price is 12% more volatile than the S&P 500. Comparatively, Invacare Corporation has a beta of 2.39, indicating that its share price is 139% more volatile than the S&P 500.
Insider and Institutional Ownership
90.6% of West Pharmaceutical Services shares are held by institutional investors. 1.9% of West Pharmaceutical Services shares are held by insiders. Comparatively, 2.6% of Invacare Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Earnings & Valuation
This table compares West Pharmaceutical Services and Invacare Corporation’s gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|West Pharmaceutical Services||$1.54 billion||4.51||$317.90 million||$2.34||40.15|
|Invacare Corporation||$980.12 million||0.47||-$13.64 million||($1.93)||-7.28|
West Pharmaceutical Services has higher revenue and earnings than Invacare Corporation. Invacare Corporation 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.
West Pharmaceutical Services beats Invacare Corporation on 12 of the 16 factors compared between the two stocks.
About West Pharmaceutical Services
West Pharmaceutical Services, Inc. is a manufacturer of packaging components and delivery systems for injectable drugs and healthcare products. The Company’s products include vial containment solutions, prefillable systems, self-injection platforms, cartridge systems and components, reconstitution and transfer systems, intradermal delivery solutions, specialty components, and contract manufacturing and analytical services. The Company’s segments include Proprietary Products and Contract-Manufactured Products. The Proprietary Products segment develops commercial and operational strategies across its global network, with specific emphasis on product offerings to biologic, generic and pharmaceutical drug customers. The Contract-Manufactured Products segment serves as an integrated business focused on the design, manufacture and automated assembly of various devices, primarily for pharmaceutical, diagnostic and medical device customers.
About Invacare Corporation
Invacare Corporation is a manufacturer and distributor for medical equipment used in non-acute care settings. The Company’s geographical segments are Europe; North America, which includes North America/Home Medical Equipment (North America/HME) and Institutional Products Group (IPG) segments, and Asia/Pacific. The Company manufactures and distributes three product categories: mobility and seating, lifestyle and respiratory therapy. It provides medical device solutions for congenital (cerebral palsy, muscular dystrophy and spina bifida), acquired (stroke, spinal cord injury, traumatic brain injury, post-acute recovery and pressure ulcers) and degenerative (amyotrophic lateral sclerosis, multiple sclerosis, chronic obstructive pulmonary disease (COPD), elderly and bariatric) ailments. The Company sells its products to home medical equipment providers with retail and e-commerce channels, residential living operators, distributors and government health services.
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