Contrasting Embecta (NASDAQ:EMBC) and Organon & Co. (NYSE:OGN)

Organon & Co. (NYSE:OGN) and Embecta (NASDAQ:EMBC) are both medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, institutional ownership, earnings and profitability.

Analyst Ratings

This is a summary of current ratings and price targets for Organon & Co. and Embecta, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Organon & Co.	4	2	0	1	1.71
Embecta	0	3	1	0	2.25

Organon & Co. currently has a consensus price target of $8.38, indicating a potential upside of 4.36%. Embecta has a consensus price target of $18.50, indicating a potential upside of 44.98%. Given Embecta’s stronger consensus rating and higher probable upside, analysts clearly believe Embecta is more favorable than Organon & Co..

Profitability

This table compares Organon & Co. and Embecta’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Organon & Co.	7.95%	143.47%	7.14%
Embecta	8.83%	-24.62%	15.40%

Valuation & Earnings

This table compares Organon & Co. and Embecta”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Organon & Co.	$6.40 billion	0.33	$864.00 million	$1.92	4.18
Embecta	$1.08 billion	0.70	$95.40 million	$1.63	7.83

Organon & Co. has higher revenue and earnings than Embecta. Organon & Co. is trading at a lower price-to-earnings ratio than Embecta, indicating that it is currently the more affordable of the two stocks.

Dividends

Organon & Co. pays an annual dividend of $0.08 per share and has a dividend yield of 1.0%. Embecta pays an annual dividend of $0.60 per share and has a dividend yield of 4.7%. Organon & Co. pays out 4.2% of its earnings in the form of a dividend. Embecta pays out 36.8% 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.

Institutional and Insider Ownership

77.4% of Organon & Co. shares are held by institutional investors. Comparatively, 93.8% of Embecta shares are held by institutional investors. 2.0% of Organon & Co. shares are held by company insiders. Comparatively, 1.3% of Embecta shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

Organon & Co. has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500. Comparatively, Embecta has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500.

Summary

Embecta beats Organon & Co. on 10 of the 17 factors compared between the two stocks.

About Organon & Co.

Organon & Co. is a science based global pharmaceutical company, which develops and delivers innovative health solutions through a portfolio of prescription therapies within women’s health, biosimilars and established brands. The company was founded on March 11, 2020, and is headquartered in Jersey City, NJ.

About Embecta

Embecta Corp., a medical device company, focuses on the provision of various solutions to enhance the health and wellbeing of people living with diabetes. Its products include pen needles, syringes, and safety injection devices, as well as digital applications to assist people with managing patient's diabetes. The company primarily sells its products to wholesalers and distributors in the United States and internationally. Embecta Corp. was founded in 1924 and is headquartered in Parsippany, New Jersey.