Financial Review: AmerisourceBergen Corporation (Holding Co) (ABC) vs. Prestige Brand Holdings (PBH)

AmerisourceBergen Corporation (Holding Co) (NYSE: ABC) and Prestige Brand Holdings (NYSE:PBH) are both mid-cap medical companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, earnings, institutional ownership, valuation and dividends.

Institutional and Insider Ownership

68.8% of AmerisourceBergen Corporation (Holding Co) shares are owned by institutional investors. Comparatively, 97.9% of Prestige Brand Holdings shares are owned by institutional investors. 27.4% of AmerisourceBergen Corporation (Holding Co) shares are owned by company insiders. Comparatively, 1.0% of Prestige Brand Holdings shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Volatility & Risk

AmerisourceBergen Corporation (Holding Co) has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500. Comparatively, Prestige Brand Holdings has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500.

Dividends

AmerisourceBergen Corporation (Holding Co) pays an annual dividend of $1.46 per share and has a dividend yield of 1.9%. Prestige Brand Holdings does not pay a dividend. AmerisourceBergen Corporation (Holding Co) pays out 38.0% of its earnings in the form of a dividend. Prestige Brand Holdings has increased its dividend for 12 consecutive years.

Analyst Recommendations

This is a summary of current ratings and price targets for AmerisourceBergen Corporation (Holding Co) and Prestige Brand Holdings, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AmerisourceBergen Corporation (Holding Co) 0 4 5 0 2.56
Prestige Brand Holdings 0 1 5 0 2.83

AmerisourceBergen Corporation (Holding Co) currently has a consensus price target of $93.14, suggesting a potential upside of 18.50%. Prestige Brand Holdings has a consensus price target of $66.00, suggesting a potential upside of 30.51%. Given Prestige Brand Holdings’ stronger consensus rating and higher probable upside, analysts clearly believe Prestige Brand Holdings is more favorable than AmerisourceBergen Corporation (Holding Co).

Profitability

This table compares AmerisourceBergen Corporation (Holding Co) and Prestige Brand Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AmerisourceBergen Corporation (Holding Co) 0.56% 56.07% 3.83%
Prestige Brand Holdings 11.70% 16.06% 3.89%

Valuation & Earnings

This table compares AmerisourceBergen Corporation (Holding Co) and Prestige Brand Holdings’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
AmerisourceBergen Corporation (Holding Co) $151.58 billion 0.11 $2.43 billion $3.84 20.47
Prestige Brand Holdings $929.06 million 2.88 $317.46 million $2.03 24.91

AmerisourceBergen Corporation (Holding Co) has higher revenue and earnings than Prestige Brand Holdings. AmerisourceBergen Corporation (Holding Co) is trading at a lower price-to-earnings ratio than Prestige Brand Holdings, indicating that it is currently the more affordable of the two stocks.

Summary

Prestige Brand Holdings beats AmerisourceBergen Corporation (Holding Co) on 10 of the 16 factors compared between the two stocks.

About AmerisourceBergen Corporation (Holding Co)

AmerisourceBergen Corporation is a pharmaceutical sourcing and distribution services company. The Company’s segments include Pharmaceutical Distribution and Other. The Company provides services to healthcare providers, and pharmaceutical and biotech manufacturers. As of June 30, 2016, the Pharmaceutical Distribution segment consists of two operating segments, including the operations of AmerisourceBergen Drug Corporation (ABDC) and AmerisourceBergen Specialty Group (ABSG), which distributes specialty drugs to their customers. Servicing healthcare providers in the pharmaceutical supply channel, the Pharmaceutical Distribution segment’s operations provide drug distribution and related services. The Other segment consists of the operations of various segments, including the AmerisourceBergen Consulting Services (ABCS), the World Courier Group, Inc. and the MWI Veterinary Supply, Inc. ABSG operates distribution facilities that focus primarily on complex disease treatment regimens.

About Prestige Brand Holdings

Prestige Brands Holdings, Inc. is engaged in the marketing, sales and distribution of over-the-counter healthcare and household cleaning products. The Company operates through three segments: North American Over-the-Counter (OTC) Healthcare; International Over-the-Counter Healthcare, and Household Cleaning. Its portfolio of OTC healthcare products includes core brands, such as DenTek specialty oral care products, Monistat women’s health products, Nix lice treatment, Chloraseptic sore throat treatments, Clear Eyes eye care products, Compound W wart treatments, The Doctor’s NightGuard dental protector, Little Remedies pediatric over-the-counter products, Efferdent denture care products, Luden’s throat drops, Dramamine motion sickness treatment, BC and Goody’s pain relievers, Beano gas prevention, Debrox earwax remover, and Gaviscon antacid. The Company’s portfolio of Household Cleaning brands includes the Chore Boy, Comet and Spic and Span brands.

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