West Pharmaceutical Services (NYSE: WST) and CryoLife (NYSE:CRY) are both medical companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, institutional ownership, valuation, profitability, earnings, risk and analyst recommendations.

Dividends

West Pharmaceutical Services pays an annual dividend of $0.56 per share and has a dividend yield of 0.6%. CryoLife does not pay a dividend. West Pharmaceutical Services pays out 22.3% of its earnings in the form of a dividend. West Pharmaceutical Services has increased its dividend for 4 consecutive years and CryoLife has increased its dividend for 24 consecutive years.

Valuation and Earnings

This table compares West Pharmaceutical Services and CryoLife’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
West Pharmaceutical Services $1.51 billion 4.85 $143.60 million $2.51 39.28
CryoLife $180.38 million 3.63 $10.77 million $0.28 69.82

West Pharmaceutical Services has higher revenue and earnings than CryoLife. West Pharmaceutical Services is trading at a lower price-to-earnings ratio than CryoLife, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent recommendations for West Pharmaceutical Services and CryoLife, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
West Pharmaceutical Services 0 2 3 0 2.60
CryoLife 0 0 4 0 3.00

West Pharmaceutical Services presently has a consensus price target of $106.00, indicating a potential upside of 7.53%. CryoLife has a consensus price target of $23.63, indicating a potential upside of 20.84%. Given CryoLife’s stronger consensus rating and higher possible upside, analysts plainly believe CryoLife is more favorable than West Pharmaceutical Services.

Profitability

This table compares West Pharmaceutical Services and CryoLife’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
West Pharmaceutical Services 12.12% 14.47% 9.71%
CryoLife 5.28% 6.43% 4.33%

Institutional & Insider Ownership

91.8% of West Pharmaceutical Services shares are held by institutional investors. Comparatively, 70.3% of CryoLife shares are held by institutional investors. 1.9% of West Pharmaceutical Services shares are held by insiders. Comparatively, 6.0% of CryoLife shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Volatility and Risk

West Pharmaceutical Services has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500. Comparatively, CryoLife has a beta of 0.82, meaning that its share price is 18% less volatile than the S&P 500.

Summary

West Pharmaceutical Services beats CryoLife on 10 of the 17 factors compared between the two stocks.

West Pharmaceutical Services Company Profile

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.

CryoLife Company Profile

CryoLife, Inc. (CryoLife) is a medical device manufacturer and processor, and is engaged in the distribution of medical devices and implantable human tissues used in cardiac surgical procedures. The Company operates through two segments: Medical Devices and Preservation Services. The Medical Devices segment includes medical devices, such as BioGlue Surgical Adhesive, BioFoam Surgical Matrix, On-X Life Technologies Holdings, Inc. valves and surgical products, CardioGenesis cardiac laser therapy product line, PerClot and PhotoFix. PhotoFix is a pericardial patch stabilized using a dye-mediated photo-fixation process that requires no glutaraldehyde. The Preservation Services segment includes external services, such as preservation of cardiac and vascular tissues. The cardiac and vascular human tissues distributed by CryoLife include the CryoValve SG pulmonary heart valve and the CryoPatch SG pulmonary cardiac patch, both of which are processed using CryoLife’s SynerGraft technology.

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