Critical Contrast: Avantor (NYSE:AVTR) and Sotera Health (NASDAQ:SHC)

Sotera Health (NASDAQ:SHC) and Avantor (NYSE:AVTR) are both healthcare companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, analyst recommendations, earnings, institutional ownership, dividends, valuation and risk.

Volatility and Risk

Sotera Health has a beta of 1.94, suggesting that its share price is 94% more volatile than the S&P 500. Comparatively, Avantor has a beta of 0.95, suggesting that its share price is 5% less volatile than the S&P 500.

Institutional and Insider Ownership

91.0% of Sotera Health shares are owned by institutional investors. Comparatively, 95.1% of Avantor shares are owned by institutional investors. 15.4% of Sotera Health shares are owned by insiders. Comparatively, 0.3% of Avantor shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Sotera Health and Avantor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sotera Health	13.44%	40.12%	7.55%
Avantor	5.08%	9.79%	4.74%

Analyst Ratings

This is a summary of recent ratings and price targets for Sotera Health and Avantor, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sotera Health	1	2	8	0	2.64
Avantor	1	14	2	0	2.06

Sotera Health presently has a consensus target price of $21.38, suggesting a potential upside of 17.77%. Avantor has a consensus target price of $14.77, suggesting a potential downside of 7.97%. Given Sotera Health’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Sotera Health is more favorable than Avantor.

Valuation & Earnings

This table compares Sotera Health and Avantor”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sotera Health	$1.16 billion	4.45	$77.94 million	$0.57	31.84
Avantor	$6.55 billion	1.66	-$530.20 million	$0.50	32.09

Sotera Health has higher earnings, but lower revenue than Avantor. Sotera Health is trading at a lower price-to-earnings ratio than Avantor, indicating that it is currently the more affordable of the two stocks.

Summary

Sotera Health beats Avantor on 12 of the 14 factors compared between the two stocks.

About Sotera Health

Sotera Health Company engages in the provision of sterilization, lab testing, and advisory services in the United States and internationally. The company operates through three segments: Sterigenics, Nordion, and Nelson Labs. It provides mission-critical end-to-end sterilization services, including gamma and electron beam irradiation, and ethylene oxide processing, as well as designs, installs, and maintains gamma irradiation systems. The company also provides microbiological and analytical chemistry testing, as well as technical assistance, regulatory consulting, and advisory services. It serves medical devices, pharmaceuticals, food safety, agricultural products, cancer treatment, and high-performance materials industries, as well as commercial, advanced, and specialty application industries. The company was formerly known as Sotera Health Topco, Inc. and changed its name to Sotera Health Company in October 2020. Sotera Health Company was incorporated in 2015 and is headquartered in Broadview Heights, Ohio.

About Avantor

Avantor, Inc. engages in the provision of mission-critical products and services to customers in the biopharma, healthcare, education and government, advanced technologies, and applied materials industries in the Americas, Europe, Asia, the Middle East, and Africa. The company offers materials and consumables, such as purity chemicals and reagents, lab products and supplies, formulated silicone materials, customized excipients, customized single-use assemblies, process chromatography resins and columns, analytical sample prep kits, education and microbiology products, clinical trial kits, peristaltic pumps, and fluid handling tips. It also provides equipment and instrumentation products, including filtration systems, virus inactivation systems, incubators, analytical instruments, evaporators, ultra-low-temperature freezers, biological safety cabinets, and critical environment supplies. In addition, the company offers services and specialty procurements comprising onsite lab and production, clinical, equipment, procurement and sourcing, and biopharmaceutical material scale-up and development services. Further, it provides scientific research support services, such as DNA extraction, bioreactor servicing, clinical and biorepository, and compound management services. The company was founded in 1904 and is headquartered in Radnor, Pennsylvania.