West Pharmaceutical Services (NYSE:WST – Get Free Report) and Precision Optics (NASDAQ:POCI – Get Free Report) are both healthcare companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, dividends, earnings and analyst recommendations.
Risk and Volatility
West Pharmaceutical Services has a beta of 1.14, meaning that its share price is 14% more volatile than the S&P 500. Comparatively, Precision Optics has a beta of 0.32, meaning that its share price is 68% less volatile than the S&P 500.
Earnings and Valuation
This table compares West Pharmaceutical Services and Precision Optics”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| West Pharmaceutical Services | $3.07 billion | 8.01 | $493.70 million | $7.81 | 44.77 |
| Precision Optics | $19.09 million | 2.52 | -$5.78 million | ($0.63) | -6.98 |
West Pharmaceutical Services has higher revenue and earnings than Precision Optics. Precision Optics 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 Recommendations
This is a summary of current ratings for West Pharmaceutical Services and Precision Optics, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| West Pharmaceutical Services | 0 | 3 | 11 | 1 | 2.87 |
| Precision Optics | 1 | 0 | 0 | 0 | 1.00 |
West Pharmaceutical Services currently has a consensus target price of $373.85, indicating a potential upside of 6.92%. Given West Pharmaceutical Services’ stronger consensus rating and higher probable upside, equities research analysts clearly believe West Pharmaceutical Services is more favorable than Precision Optics.
Insider and Institutional Ownership
93.9% of West Pharmaceutical Services shares are held by institutional investors. Comparatively, 13.7% of Precision Optics shares are held by institutional investors. 0.6% of West Pharmaceutical Services shares are held by insiders. Comparatively, 14.4% of Precision Optics shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Profitability
This table compares West Pharmaceutical Services and Precision Optics’ 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% |
| Precision Optics | -17.03% | -37.47% | -19.96% |
Summary
West Pharmaceutical Services beats Precision Optics on 14 of the 15 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 Precision Optics
Precision Optics Corporation, Inc. designs, develops, manufactures, and sells specialized optical and illumination systems and related components primarily in the United States and the European Economic Area. It offers medical instrumentation products, including endoscopes and endocouplers, as well as other custom imaging and illumination products, such as Microprecision lenses and micro medical cameras, and 3D endoscopes for use in minimally invasive surgical procedures by hospitals and physicians. The company also provides components and assemblies for industrial and military use. It markets its products to medical device companies. The company was incorporated in 1982 and is based in Gardner, Massachusetts.
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