Reviewing Surgery Partners (NASDAQ:SGRY) & Avantor (NYSE:AVTR)

Surgery Partners (NASDAQ:SGRY) and Avantor (NYSE:AVTR) are both mid-cap medical companies, but which is the better business? We will contrast the two businesses based on the strength of their risk, profitability, analyst recommendations, institutional ownership, earnings, valuation and dividends.

Institutional and Insider Ownership

95.1% of Avantor shares are owned by institutional investors. 2.7% of Surgery Partners shares are owned by company insiders. Comparatively, 1.2% of Avantor shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and recommmendations for Surgery Partners and Avantor, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Surgery Partners	0	3	6	0	2.67
Avantor	0	8	7	0	2.47

Surgery Partners presently has a consensus price target of $33.00, suggesting a potential upside of 50.89%. Avantor has a consensus price target of $15.50, suggesting a potential upside of 25.71%. Given Surgery Partners’ stronger consensus rating and higher probable upside, equities analysts clearly believe Surgery Partners is more favorable than Avantor.

Volatility and Risk

Surgery Partners has a beta of 1.76, indicating that its share price is 76% more volatile than the S&P 500. Comparatively, Avantor has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500.

Valuation and Earnings

This table compares Surgery Partners and Avantor”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Surgery Partners	$3.11 billion	0.90	-$168.10 million	($1.43)	-15.29
Avantor	$6.78 billion	1.24	$711.50 million	$0.99	12.45

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

Profitability

This table compares Surgery Partners and Avantor’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Surgery Partners	-5.57%	2.51%	1.01%
Avantor	10.31%	11.39%	5.44%

Summary

Avantor beats Surgery Partners on 10 of the 14 factors compared between the two stocks.

About Surgery Partners

Surgery Partners, Inc., together with its subsidiaries, owns and operates a network of surgical facilities and ancillary services in the United States. The company provides ambulatory surgery centers and surgical hospitals that offer non-emergency surgical procedures in various specialties, including orthopedics and pain management, ophthalmology, gastroenterology, and general surgery. It offers diagnostic imaging, laboratory, obstetrics, oncology, pharmacy, physical therapy, and wound care; and ancillary services, including multi-specialty physician practices, urgent care facilities, and anesthesia services. In addition, it offers single- and multi-specialty facilities. Surgery Partners, Inc. was founded in 2004 and is headquartered in Brentwood, Tennessee.

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.