Financial Contrast: Express Scripts (ESRX) vs. Walgreens Boots Alliance (WBA)

Express Scripts (NASDAQ: ESRX) and Walgreens Boots Alliance (NASDAQ:WBA) are both large-cap medical companies, but which is the superior investment? We will compare the two companies based on the strength of their risk, analyst recommendations, earnings, valuation, profitability, dividends and institutional ownership.

Institutional and Insider Ownership

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89.3% of Express Scripts shares are held by institutional investors. Comparatively, 60.9% of Walgreens Boots Alliance shares are held by institutional investors. 0.8% of Express Scripts shares are held by company insiders. Comparatively, 14.8% of Walgreens Boots Alliance shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Volatility and Risk

Express Scripts has a beta of 0.99, indicating that its share price is 1% less volatile than the S&P 500. Comparatively, Walgreens Boots Alliance has a beta of 1.16, indicating that its share price is 16% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Express Scripts and Walgreens Boots Alliance, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Express Scripts 3 11 5 0 2.11
Walgreens Boots Alliance 0 9 12 0 2.57

Express Scripts currently has a consensus price target of $81.82, suggesting a potential upside of 11.34%. Walgreens Boots Alliance has a consensus price target of $83.84, suggesting a potential upside of 31.17%. Given Walgreens Boots Alliance’s stronger consensus rating and higher possible upside, analysts clearly believe Walgreens Boots Alliance is more favorable than Express Scripts.

Profitability

This table compares Express Scripts and Walgreens Boots Alliance’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Express Scripts 4.51% 25.19% 8.00%
Walgreens Boots Alliance 3.33% 20.38% 8.42%

Dividends

Walgreens Boots Alliance pays an annual dividend of $1.60 per share and has a dividend yield of 2.5%. Express Scripts does not pay a dividend. Walgreens Boots Alliance pays out 31.4% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Express Scripts and Walgreens Boots Alliance’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Express Scripts $100.06 billion 0.41 $4.52 billion $7.10 10.35
Walgreens Boots Alliance $118.21 billion 0.54 $4.08 billion $5.10 12.53

Express Scripts has higher earnings, but lower revenue than Walgreens Boots Alliance. Express Scripts is trading at a lower price-to-earnings ratio than Walgreens Boots Alliance, indicating that it is currently the more affordable of the two stocks.

Summary

Walgreens Boots Alliance beats Express Scripts on 10 of the 16 factors compared between the two stocks.

Express Scripts Company Profile

Express Scripts Holding Company operates as a pharmacy benefit management (PBM) company in the United States and Canada. The company's PBM segment offers clinical solutions; and specialized pharmacy care, home delivery and specialty pharmacy, retail network pharmacy administration, benefit design consultation, drug utilization review, drug formulary management, public exchange, administration of group purchasing organization, and digital consumer health and drug information services. This segment also provides Medicare, Medicaid, and health insurance marketplace products; Express Scripts SafeGuardRx, a suite of solutions targeting the therapy classes that pose clinical challenges and budgetary threat to its clients; and Inside Rx, a program that provide affordable access to medication for uninsured and underinsured individuals. Its Other Business Operations segment distributes specialty pharmaceuticals and medical supplies, including injectable and infusible pharmaceuticals and medications to treat specialty and rare/orphan diseases. This segment also provides medical benefit management solutions for radiology, cardiology, musculoskeletal disorders, sleep disorders, post-acute care, genetic lab, specialty pharmacy, and medical oncology. The company serves managed care organizations, health insurers, third-party administrators, employers, union-sponsored benefit plans, workers' compensation plans, government health programs, providers, clinics, hospitals, and others. As of December 31, 2017, it operated 4 automated dispensing home delivery pharmacies; 1 non-automated dispensing home delivery pharmacy; 7 non-dispensing order processing centers; 5 patient contact centers; 9 specialty home delivery pharmacies; and 34 specialty branch pharmacies. The company was formerly known as Aristotle Holding, Inc. and changed its name to Express Scripts Holding Company in April 2012. Express Scripts Holding Company was founded in 1986 and is headquartered in Saint Louis, Missouri.

Walgreens Boots Alliance Company Profile

Walgreens Boots Alliance, Inc. (Walgreens Boots Alliance) is a holding company. The Company is a global pharmacy-led, health and wellbeing enterprise. Walgreens Boots Alliance operates through three divisions, including Retail Pharmacy USA, Retail Pharmacy International and Pharmaceutical Wholesale. The Company’s products are marketed under a number of brands, which include No7, the Botanics range, Almus (generic medicines), Boots Pharmaceuticals and Soap & Glory (bathing and beauty brand). In addition, the Company has investments in Guangzhou Pharmaceuticals Corporation and Nanjing Pharmaceutical Company Limited. The Company operates in around 25 countries, which include the wholesale and distribution network with over 340 distribution centers and more than 180,000 pharmacies, health centers and hospitals in 19 countries.

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