Prestige Brand Holdings (NYSE: PBH) and Cardinal Health (NYSE:CAH) are both mid-cap consumer discretionary companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, earnings, dividends, valuation, profitability and institutional ownership.

Valuation and Earnings

This table compares Prestige Brand Holdings and Cardinal Health’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Prestige Brand Holdings $929.06 million 2.90 $317.46 million $2.03 25.07
Cardinal Health $129.98 billion 0.16 $3.07 billion $4.04 16.60

Cardinal Health has higher revenue and earnings than Prestige Brand Holdings. Cardinal Health is trading at a lower price-to-earnings ratio than Prestige Brand Holdings, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Prestige Brand Holdings has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500. Comparatively, Cardinal Health has a beta of 0.85, meaning that its stock price is 15% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Prestige Brand Holdings and Cardinal Health, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Prestige Brand Holdings 0 1 5 0 2.83
Cardinal Health 0 10 3 0 2.23

Prestige Brand Holdings currently has a consensus price target of $65.17, suggesting a potential upside of 28.05%. Cardinal Health has a consensus price target of $78.78, suggesting a potential upside of 17.46%. Given Prestige Brand Holdings’ stronger consensus rating and higher probable upside, equities research analysts clearly believe Prestige Brand Holdings is more favorable than Cardinal Health.

Profitability

This table compares Prestige Brand Holdings and Cardinal Health’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Prestige Brand Holdings 11.70% 16.06% 3.89%
Cardinal Health 0.99% 26.20% 4.81%

Insider & Institutional Ownership

98.6% of Prestige Brand Holdings shares are owned by institutional investors. Comparatively, 87.6% of Cardinal Health shares are owned by institutional investors. 1.0% of Prestige Brand Holdings shares are owned by company insiders. Comparatively, 0.9% of Cardinal Health 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.

Dividends

Cardinal Health pays an annual dividend of $1.85 per share and has a dividend yield of 2.8%. Prestige Brand Holdings does not pay a dividend. Cardinal Health pays out 45.8% of its earnings in the form of a dividend. Prestige Brand Holdings has increased its dividend for 12 consecutive years.

Summary

Prestige Brand Holdings beats Cardinal Health on 11 of the 17 factors compared between the two stocks.

Prestige Brand Holdings Company Profile

Prestige Brands Holdings, Inc. is engaged in the marketing, sales and distribution of over-the-counter healthcare and household cleaning products. The Company operates through three segments: North American Over-the-Counter (OTC) Healthcare; International Over-the-Counter Healthcare, and Household Cleaning. Its portfolio of OTC healthcare products includes core brands, such as DenTek specialty oral care products, Monistat women’s health products, Nix lice treatment, Chloraseptic sore throat treatments, Clear Eyes eye care products, Compound W wart treatments, The Doctor’s NightGuard dental protector, Little Remedies pediatric over-the-counter products, Efferdent denture care products, Luden’s throat drops, Dramamine motion sickness treatment, BC and Goody’s pain relievers, Beano gas prevention, Debrox earwax remover, and Gaviscon antacid. The Company’s portfolio of Household Cleaning brands includes the Chore Boy, Comet and Spic and Span brands.

Cardinal Health Company Profile

Cardinal Health, Inc. is a healthcare services and products company. The Company operates through two segments: Pharmaceutical and Medical. The Pharmaceutical segment distributes branded and generic pharmaceutical, specialty pharmaceutical, over-the-counter healthcare and consumer products. This segment also operates nuclear pharmacies and cyclotron facilities; provides pharmacy management services to hospitals, as well as medication therapy management and patient outcomes services to hospitals, other healthcare providers and payers, and provides services to healthcare companies. The Medical segment distributes a range of medical, surgical and laboratory products, and provides services to hospitals, ambulatory surgery centers, clinical laboratories and other healthcare providers. This segment also manufactures, sources and develops its own Cardinal Health brand medical and surgical products. It provides post-acute care management and transition services, and software to hospitals.

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