Head-To-Head Analysis: West Pharmaceutical Services (NYSE:WST) & Becton, Dickinson and Company (NYSE:BDX)

Becton, Dickinson and Company (NYSE:BDX) and West Pharmaceutical Services (NYSE:WST) are both large-cap medical companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, institutional ownership, dividends, earnings, profitability, analyst recommendations and risk.

Profitability

This table compares Becton, Dickinson and Company and West Pharmaceutical Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Becton, Dickinson and Company	7.51%	16.23%	7.46%
West Pharmaceutical Services	16.29%	18.16%	13.45%

Dividends

Becton, Dickinson and Company pays an annual dividend of $4.16 per share and has a dividend yield of 2.3%. West Pharmaceutical Services pays an annual dividend of $0.88 per share and has a dividend yield of 0.3%. Becton, Dickinson and Company pays out 74.8% of its earnings in the form of a dividend. West Pharmaceutical Services pays out 13.0% 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. Becton, Dickinson and Company has raised its dividend for 53 consecutive years. Becton, Dickinson and Company is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Becton, Dickinson and Company and West Pharmaceutical Services, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Becton, Dickinson and Company	0	9	3	0	2.25
West Pharmaceutical Services	0	4	9	2	2.87

Becton, Dickinson and Company presently has a consensus target price of $203.50, indicating a potential upside of 14.40%. West Pharmaceutical Services has a consensus target price of $349.20, indicating a potential upside of 29.16%. Given West Pharmaceutical Services’ stronger consensus rating and higher possible upside, analysts plainly believe West Pharmaceutical Services is more favorable than Becton, Dickinson and Company.

Valuation & Earnings

This table compares Becton, Dickinson and Company and West Pharmaceutical Services”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Becton, Dickinson and Company	$21.39 billion	2.38	$1.71 billion	$5.56	31.99
West Pharmaceutical Services	$3.02 billion	6.45	$492.70 million	$6.75	40.05

Becton, Dickinson and Company has higher revenue and earnings than West Pharmaceutical Services. Becton, Dickinson and Company 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.

Institutional and Insider Ownership

87.0% of Becton, Dickinson and Company shares are owned by institutional investors. Comparatively, 93.9% of West Pharmaceutical Services shares are owned by institutional investors. 0.4% of Becton, Dickinson and Company shares are owned by insiders. Comparatively, 0.5% of West Pharmaceutical Services shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Risk & Volatility

Becton, Dickinson and Company has a beta of 0.25, suggesting that its share price is 75% less volatile than the S&P 500. Comparatively, West Pharmaceutical Services has a beta of 1.08, suggesting that its share price is 8% more volatile than the S&P 500.

Summary

West Pharmaceutical Services beats Becton, Dickinson and Company on 14 of the 18 factors compared between the two stocks.

About Becton, Dickinson and Company

Becton, Dickinson and Company develops, manufactures, and sells medical supplies, devices, laboratory equipment, and diagnostic products for healthcare institutions, physicians, life science researchers, clinical laboratories, pharmaceutical industry, and the general public worldwide. The company operates in three segments: BD Medical, BD Life Sciences, and BD Interventional. The BD Medical segment provides peripheral intravenous (IV) and advanced peripheral catheters, central lines, acute dialysis catheters, vascular access technology, vascular care and preparation products, needle-free IV connectors and extensions sets, closed-system drug transfer devices, hazardous drug detections, hypodermic syringes and needles, anesthesia needles and trays, enteral syringes, and sharps disposal systems; IV medication safety and infusion therapy delivery systems, medication compounding workflow systems, automated medication dispensing and supply management systems, and medication inventory optimization and tracking systems; and prefillable drug delivery systems. The BD Life Sciences segment offers specimen and blood collection products; automated blood and tuberculosis culturing, molecular testing, microorganism identification and drug susceptibility, and liquid-based cytology systems, as well as rapid diagnostic assays, microbiology laboratory automation products, and plated media products; and fluorescence-activated cell sorters and analyzers, antibodies and kits, reagent systems, and solutions for single-cell gene expression analysis, as well as clinical oncology, immunological, and transplantation diagnostic/monitoring reagents and analyzers. The BD Interventional segment provides hernia and soft tissue repair, biological and bioresorbable grafts, biosurgery, and other surgical products; surgical infection prevention; peripheral intervention products; and urology and critical care products. The company was founded in 1897 and is headquartered in Franklin Lakes, New Jersey.

About West Pharmaceutical Services

West Pharmaceutical Services, Inc. designs, manufactures, and sells containment and delivery systems for injectable drugs and healthcare products in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates in two segments, Proprietary Products and Contract-Manufactured Products. The Proprietary Products segment offers stoppers and seals for injectable packaging systems; syringe and cartridge components, including custom solutions for the needs of injectable drug applications, as well as administration systems that enhance the safe delivery of drugs through advanced reconstitution, mixing, and transfer technologies; and films, coatings, washing, and vision inspection and sterilization processes and services to enhance the quality of packaging components. This segment also provides drug containment solutions, including Crystal Zenith, a cyclic olefin polymer in the form of vials, syringes, and cartridges; and self-injection devices; and a range of integrated solutions, including analytical lab services, pre-approval primary packaging support and engineering development, regulatory expertise, and after-sales technical support. This segment serves biologic, generic, and pharmaceutical drug companies. The Contract-Manufactured Products segment is involved in the design, manufacture, and automated assembly of devices used in surgical, diagnostic, ophthalmic, injectable, and other drug delivery systems, as well as consumer products. The company serves pharmaceutical, diagnostic, and medical device companies. It sells and distributes its products through its sales force and distribution network, contract sales agents, and regional distributors. West Pharmaceutical Services, Inc. was founded in 1923 and is headquartered in Exton, Pennsylvania.