Head-To-Head Analysis: Orthofix International (NASDAQ:OFIX) versus West Pharmaceutical Services (WST)

West Pharmaceutical Services (NYSE: WST) and Orthofix International (NASDAQ:OFIX) are both healthcare companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, risk, earnings, dividends, valuation, analyst recommendations and institutional ownership.

Profitability

This table compares West Pharmaceutical Services and Orthofix International’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%
Orthofix International 0.33% 10.26% 7.57%

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
West Pharmaceutical Services $1.51 billion 4.93 $143.60 million $2.51 39.92
Orthofix International $409.79 million 2.42 $3.05 million $0.02 2,725.50

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

Analyst Ratings

This is a summary of recent recommendations and price targets for West Pharmaceutical Services and Orthofix International, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
West Pharmaceutical Services 0 2 2 0 2.50
Orthofix International 0 0 5 0 3.00

West Pharmaceutical Services presently has a consensus target price of $106.00, suggesting a potential upside of 5.78%. Orthofix International has a consensus target price of $53.30, suggesting a potential downside of 2.22%. Given West Pharmaceutical Services’ higher possible upside, research analysts clearly believe West Pharmaceutical Services is more favorable than Orthofix International.

Institutional and Insider Ownership

93.3% of West Pharmaceutical Services shares are held by institutional investors. Comparatively, 94.6% of Orthofix International shares are held by institutional investors. 1.9% of West Pharmaceutical Services shares are held by insiders. Comparatively, 5.6% of Orthofix International shares are held 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.

Risk & Volatility

West Pharmaceutical Services has a beta of 1.12, meaning that its share price is 12% more volatile than the S&P 500. Comparatively, Orthofix International has a beta of 0.14, meaning that its share price is 86% less volatile than the S&P 500.

Dividends

West Pharmaceutical Services pays an annual dividend of $0.56 per share and has a dividend yield of 0.6%. Orthofix International does not pay a dividend. West Pharmaceutical Services pays out 22.3% of its earnings in the form of a dividend. Orthofix International has raised its dividend for 25 consecutive years.

Summary

West Pharmaceutical Services beats Orthofix International 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.

Orthofix International Company Profile

Orthofix International N.V. (Orthofix) is a global medical device company. The Company is focused on providing reconstructive and regenerative orthopedic and spine solutions to physicians. The company operates in four segments: BioStim, Biologics, Extremity Fixation and Spine Fixation. Its BioStim solutions products include Cervical-Stim, Spinal-Stim and Physio-Stim. The Biologics products include AlloQuent Structural Allografts, Trinity ELITE, Trinity Evolution and VersaShield. The Extremity Fixation products include Fixator, Eight-Plate Guided Growth System and Contours VPS Volar Plating System III. The Spine Fixation products include Hallmark Anterior Cervical Plate System, Ascent LE Posterior Occipital Cervico-Thoracic (POCT) System, Firebird Deformity Correction System, Phoenix Minimally Invasive Spinal Fixation System, Samba-Screw System, LONESTAR Cervical Stand Alone (CSA), SKYHAWK Lateral Interbody Fusion System & Lateral Plate System and CENTURION POCT System.

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