Contrasting Cardiovascular Systems (CSII) and West Pharmaceutical Services (WST)

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

Profitability

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

Net Margins Return on Equity Return on Assets
Cardiovascular Systems -0.93% 0.74% 0.47%
West Pharmaceutical Services 12.12% 14.47% 9.71%

Dividends

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

Institutional and Insider Ownership

74.5% of Cardiovascular Systems shares are owned by institutional investors. Comparatively, 90.1% of West Pharmaceutical Services shares are owned by institutional investors. 3.3% of Cardiovascular Systems shares are owned by insiders. Comparatively, 1.9% of West Pharmaceutical Services shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Cardiovascular Systems has a beta of 2.53, indicating that its share price is 153% more volatile than the S&P 500. Comparatively, West Pharmaceutical Services has a beta of 1.14, indicating that its share price is 14% more volatile than the S&P 500.

Valuation and Earnings

This table compares Cardiovascular Systems and West Pharmaceutical Services’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Cardiovascular Systems $204.91 million 3.95 -$1.79 million ($0.06) -395.43
West Pharmaceutical Services $1.51 billion 5.00 $143.60 million $2.51 40.50

West Pharmaceutical Services has higher revenue and earnings than Cardiovascular Systems. Cardiovascular Systems 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.

Analyst Ratings

This is a summary of recent ratings for Cardiovascular Systems and West Pharmaceutical Services, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cardiovascular Systems 1 2 3 0 2.33
West Pharmaceutical Services 0 2 3 0 2.60

Cardiovascular Systems presently has a consensus price target of $35.33, indicating a potential upside of 48.90%. West Pharmaceutical Services has a consensus price target of $106.00, indicating a potential upside of 4.28%. Given Cardiovascular Systems’ higher possible upside, analysts clearly believe Cardiovascular Systems is more favorable than West Pharmaceutical Services.

Summary

West Pharmaceutical Services beats Cardiovascular Systems on 10 of the 16 factors compared between the two stocks.

Cardiovascular Systems Company Profile

Cardiovascular Systems, Inc. is a medical technology company. The Company is engaged in treating patients suffering from peripheral and coronary artery diseases, including those with arterial calcium. The Company develops an orbital atherectomy technology for both peripheral and coronary commercial applications. Its peripheral artery disease (PAD) systems are catheter-based platforms capable of treating a range of plaque types in leg arteries both above and below the knee. Its products include Diamondback 360 Peripheral Orbital Atherectomy System (OAS) (Diamondback 360 Peripheral), the Stealth 360 OAS (Stealth 360), Diamondback 360 Peripheral, Diamondback 360 60cm Peripheral, Diamondback 360 Low Profile Peripheral, Diamondback 360 1.50 Peripheral and Diamondback 360 2.00 Peripheral. The Company’s coronary arterial disease (CAD) product, Diamondback 360 Coronary OAS (Coronary OAS), is marketed as a treatment for severely calcified coronary arteries.

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.

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