IDEXX Laboratories (NASDAQ:IDXX) and West Pharmaceutical Services (NYSE:WST) Critical Analysis

West Pharmaceutical Services (NYSE:WST) and IDEXX Laboratories (NASDAQ:IDXX) are both large-cap healthcare companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, risk, dividends, institutional ownership, profitability and analyst recommendations.

Institutional and Insider Ownership

93.9% of West Pharmaceutical Services shares are held by institutional investors. Comparatively, 87.8% of IDEXX Laboratories shares are held by institutional investors. 0.6% of West Pharmaceutical Services shares are held by insiders. Comparatively, 0.8% of IDEXX Laboratories 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.

Risk and Volatility

West Pharmaceutical Services has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500. Comparatively, IDEXX Laboratories has a beta of 1.55, suggesting that its stock price is 55% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for West Pharmaceutical Services and IDEXX Laboratories, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
West Pharmaceutical Services	0	2	12	0	2.86
IDEXX Laboratories	0	5	6	0	2.55

West Pharmaceutical Services currently has a consensus target price of $385.33, suggesting a potential upside of 4.90%. IDEXX Laboratories has a consensus target price of $747.00, suggesting a potential upside of 42.57%. Given IDEXX Laboratories’ higher probable upside, analysts clearly believe IDEXX Laboratories is more favorable than West Pharmaceutical Services.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
West Pharmaceutical Services	16.98%	20.11%	14.83%
IDEXX Laboratories	25.03%	71.96%	33.60%

Earnings & Valuation

This table compares West Pharmaceutical Services and IDEXX Laboratories”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
West Pharmaceutical Services	$3.33 billion	7.77	$493.70 million	$7.81	47.03
IDEXX Laboratories	$4.30 billion	9.59	$1.06 billion	$14.22	36.85

IDEXX Laboratories has higher revenue and earnings than West Pharmaceutical Services. IDEXX Laboratories 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.

Summary

IDEXX Laboratories beats West Pharmaceutical Services on 10 of the 14 factors compared between the two stocks.

About West Pharmaceutical Services

West Pharmaceutical Services, Inc. designs, manufactures, and sells containment and delivery systems for injectable drugs and healthcare products in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates in two segments, Proprietary Products and Contract-Manufactured Products. The Proprietary Products segment offers stoppers and seals for injectable packaging systems; syringe and cartridge components, including custom solutions for the needs of injectable drug applications, as well as administration systems that enhance the safe delivery of drugs through advanced reconstitution, mixing, and transfer technologies; and films, coatings, washing, and vision inspection and sterilization processes and services to enhance the quality of packaging components. This segment also provides drug containment solutions, including Crystal Zenith, a cyclic olefin polymer in the form of vials, syringes, and cartridges; and self-injection devices; and a range of integrated solutions, including analytical lab services, pre-approval primary packaging support and engineering development, regulatory expertise, and after-sales technical support. This segment serves biologic, generic, and pharmaceutical drug companies. The Contract-Manufactured Products segment is involved in the design, manufacture, and automated assembly of devices used in surgical, diagnostic, ophthalmic, injectable, and other drug delivery systems, as well as consumer products. The company serves pharmaceutical, diagnostic, and medical device companies. It sells and distributes its products through its sales force and distribution network, contract sales agents, and regional distributors. West Pharmaceutical Services, Inc. was founded in 1923 and is headquartered in Exton, Pennsylvania.

About IDEXX Laboratories

IDEXX Laboratories, Inc. develops, manufactures, and distributes products primarily for the companion animal veterinary, livestock and poultry, dairy, and water testing markets in Africa, the Asia Pacific, Canada, Europe, Latin America, and internationally. The company operates through three segments: Companion Animal Group; Water Quality Products; and Livestock, Poultry and Dairy. It also provides point-of-care veterinary diagnostic products, including instruments, consumables, and rapid assay test kits; veterinary reference laboratory diagnostic and consulting services; practice management and diagnostic imaging systems and services for veterinarians; and health monitoring, biological materials testing, and laboratory diagnostic instruments, and services for biomedical research community. In addition, the company offers diagnostic and health-monitoring products for livestock, poultry, and dairy; products that test water for various microbiological contaminants; point-of-care electrolytes and blood gas analyzers; in-clinic chemistry, blood and urine chemistry, hematology, immunoassay, urinalysis, and coagulation analyzers; and SNAP rapid assays test kits. Further, it provides Colilert, Colilert-18, and Colisure tests, which detect the presence of total coliforms and E. coli in water; Enterolert, Pseudalert, Filta-Max and Filta-Max xpress, Legiolert, and Quanti-Tray products; and veterinary software and services for independent veterinary clinics and corporate groups. Additionally, the company offers human medical point-of-care products and laboratory diagnostics services. The company markets its products through marketing, customer service, sales, and technical service groups, as well as through independent distributors and other resellers. IDEXX Laboratories, Inc. was incorporated in 1983 and is headquartered in Westbrook, Maine.