Head-To-Head Contrast: Sotera Health (NASDAQ:SHC) versus Embecta (NASDAQ:EMBC)

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Sotera Health	9.91%	39.73%	7.05%
Embecta	10.73%	-23.96%	14.12%

Volatility and Risk

Sotera Health has a beta of 1.79, indicating that its stock price is 79% more volatile than the S&P 500. Comparatively, Embecta has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500.

Earnings & Valuation

This table compares Sotera Health and Embecta”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sotera Health	$1.16 billion	3.88	$77.94 million	$0.41	38.59
Embecta	$1.08 billion	0.17	$95.40 million	$1.90	1.64

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

Analyst Ratings

This is a breakdown of current recommendations for Sotera Health and Embecta, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sotera Health	0	3	8	0	2.73
Embecta	3	2	0	0	1.40

Sotera Health presently has a consensus price target of $20.29, indicating a potential upside of 28.23%. Embecta has a consensus price target of $11.00, indicating a potential upside of 253.70%. Given Embecta’s higher probable upside, analysts clearly believe Embecta is more favorable than Sotera Health.

Institutional and Insider Ownership

91.0% of Sotera Health shares are held by institutional investors. Comparatively, 93.8% of Embecta shares are held by institutional investors. 15.4% of Sotera Health shares are held by company insiders. Comparatively, 1.3% of Embecta shares are held by company 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.

Summary

Sotera Health beats Embecta on 8 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 Embecta

Embecta Corp., a medical device company, focuses on the provision of various solutions to enhance the health and wellbeing of people living with diabetes. Its products include pen needles, syringes, and safety injection devices, as well as digital applications to assist people with managing patient's diabetes. The company primarily sells its products to wholesalers and distributors in the United States and internationally. Embecta Corp. was founded in 1924 and is headquartered in Parsippany, New Jersey.