Owens & Minor (NYSE: OMI) and Patterson Companies (NASDAQ:PDCO) are both medical companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, valuation, profitability, institutional ownership and earnings.
Owens & Minor pays an annual dividend of $1.03 per share and has a dividend yield of 3.7%. Patterson Companies pays an annual dividend of $1.04 per share and has a dividend yield of 2.9%. Owens & Minor pays out 65.2% of its earnings in the form of a dividend. Patterson Companies pays out 58.1% 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. Patterson Companies has increased its dividend for 18 consecutive years.
Volatility and Risk
Owens & Minor has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500. Comparatively, Patterson Companies has a beta of 0.95, indicating that its stock price is 5% less volatile than the S&P 500.
Insider & Institutional Ownership
96.2% of Owens & Minor shares are held by institutional investors. Comparatively, 89.3% of Patterson Companies shares are held by institutional investors. 1.7% of Owens & Minor shares are held by company insiders. Comparatively, 0.5% of Patterson Companies shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
Earnings & Valuation
This table compares Owens & Minor and Patterson Companies’ gross revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Owens & Minor||$9.38 billion||0.18||$229.96 million||$1.58||17.47|
|Patterson Companies||$5.59 billion||0.61||$408.06 million||$1.79||20.36|
Patterson Companies has higher revenue, but lower earnings than Owens & Minor. Owens & Minor is trading at a lower price-to-earnings ratio than Patterson Companies, indicating that it is currently the more affordable of the two stocks.
This table compares Owens & Minor and Patterson Companies’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Owens & Minor||1.02%||11.64%||4.13%|
This is a breakdown of current ratings for Owens & Minor and Patterson Companies, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Owens & Minor||1||1||0||0||1.50|
Owens & Minor presently has a consensus target price of $32.00, indicating a potential upside of 15.94%. Patterson Companies has a consensus target price of $42.50, indicating a potential upside of 16.60%. Given Patterson Companies’ stronger consensus rating and higher probable upside, analysts plainly believe Patterson Companies is more favorable than Owens & Minor.
Patterson Companies beats Owens & Minor on 12 of the 17 factors compared between the two stocks.
About Owens & Minor
Owens & Minor, Inc. is a healthcare services company that connects the world of medical products to the point of care. The Company provides supply chain assistance to the providers of healthcare services and the manufacturers of healthcare products, supplies and devices. The Company’s segments include Domestic, International and Clinical & Procedural Solutions (CPS). The Domestic Segment offers a portfolio of products and services to healthcare providers and manufacturers in the United States. The Company also offers additional services to healthcare providers, including supplier management, analytics, inventory management, outsourced resource management, clinical supply management and business process consulting. The International segment includes its European distribution and logistics business. The CPS segment provides product-related solutions, helping manufacturers and healthcare providers source, assemble and deliver procedure kits to the point-of-care.
About Patterson Companies
Patterson Companies, Inc. is a value-added distributor focused on providing a customer experience to professionals in the dental and animal health markets. The Company operates through three segments: dental, animal health and corporate. Dental and Animal health are strategic business units that offer similar products and services to different customer bases. Dental provides a virtually complete range of consumable dental products, equipment and software and turnkey digital solutions. In addition it provides value-added services to dentists, dental laboratories, institutions and other healthcare professionals throughout North America. Animal health is a leading, full-line distributor of animal health products, services and technologies. Corporate segment is comprised of general and administrative expenses, including home office support costs in areas such as information technology, finance, legal, human resources and facilities.
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