Financial Review: DENTSPLY SIRONA (XRAY) versus West Pharmaceutical Services (WST)

DENTSPLY SIRONA (NASDAQ: XRAY) and West Pharmaceutical Services (NYSE:WST) are both mid-cap medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their earnings, profitability, dividends, risk, valuation, analyst recommendations and institutional ownership.

Profitability

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

Net Margins Return on Equity Return on Assets
DENTSPLY SIRONA -20.57% 7.24% 5.02%
West Pharmaceutical Services 11.42% 14.02% 9.32%

Valuation and Earnings

This table compares DENTSPLY SIRONA and West Pharmaceutical Services’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
DENTSPLY SIRONA $3.84 billion 3.48 $823.80 million ($3.47) -16.77
West Pharmaceutical Services $1.54 billion 4.56 $317.90 million $2.34 40.56

DENTSPLY SIRONA has higher revenue and earnings than West Pharmaceutical Services. DENTSPLY SIRONA 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.

Insider & Institutional Ownership

93.9% of DENTSPLY SIRONA shares are held by institutional investors. Comparatively, 90.6% of West Pharmaceutical Services shares are held by institutional investors. 2.0% of DENTSPLY SIRONA shares are held by company insiders. Comparatively, 1.9% of West Pharmaceutical Services shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

DENTSPLY SIRONA has a beta of 1.28, indicating that its stock price is 28% more volatile than the S&P 500. Comparatively, West Pharmaceutical Services has a beta of 1.11, indicating that its stock price is 11% more volatile than the S&P 500.

Dividends

DENTSPLY SIRONA pays an annual dividend of $0.35 per share and has a dividend yield of 0.6%. West Pharmaceutical Services pays an annual dividend of $0.52 per share and has a dividend yield of 0.5%. DENTSPLY SIRONA pays out -10.1% of its earnings in the form of a dividend. West Pharmaceutical Services pays out 22.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. DENTSPLY SIRONA has raised its dividend for 24 consecutive years. DENTSPLY SIRONA is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of recent ratings and price targets for DENTSPLY SIRONA and West Pharmaceutical Services, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
DENTSPLY SIRONA 1 2 5 0 2.50
West Pharmaceutical Services 0 1 3 0 2.75

DENTSPLY SIRONA presently has a consensus target price of $66.00, suggesting a potential upside of 13.40%. West Pharmaceutical Services has a consensus target price of $107.00, suggesting a potential upside of 12.73%. Given DENTSPLY SIRONA’s higher possible upside, equities analysts clearly believe DENTSPLY SIRONA is more favorable than West Pharmaceutical Services.

Summary

DENTSPLY SIRONA beats West Pharmaceutical Services on 10 of the 16 factors compared between the two stocks.

DENTSPLY SIRONA Company Profile

DENTSPLY SIRONA Inc. is a manufacturer of professional dental products and technologies. The Company develops, manufactures, and markets solutions offering, including dental and oral health products, as well as other consumable medical devices. It operates through two segments: Dental and Healthcare Consumables, and Technologies. The dental industry encompasses the diagnosis, treatment and prevention of disease and ailments of the teeth, gums and supporting bone. Its principal dental product categories are dental consumable products, dental laboratory products, dental specialty products and dental equipment. Additionally, its consumable medical device products are used for urological and surgical applications. These products are produced by the Company in the United States and internationally and are distributed throughout the world under various brand names, including ANKYLOS, AQUASIL ULTRA, ARTICADENT, ATLANTIS, CALIBRA, CAULK, CAVITRON, CELTRA, DELTON, DENTSPLY, DETREY and DYRACT.

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.

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