Express Scripts (ESRX) and 1-800-PetMeds (PETS) Head to Head Survey

Express Scripts (NASDAQ: ESRX) and 1-800-PetMeds (NASDAQ:PETS) are both medical companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, earnings, dividends, institutional ownership, profitability and analyst recommendations.

Dividends

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1-800-PetMeds pays an annual dividend of $1.00 per share and has a dividend yield of 2.8%. Express Scripts does not pay a dividend. 1-800-PetMeds pays out 85.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Volatility and Risk

Express Scripts has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500. Comparatively, 1-800-PetMeds has a beta of 0.98, meaning that its share price is 2% less volatile than the S&P 500.

Profitability

This table compares Express Scripts and 1-800-PetMeds’ 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%
1-800-PetMeds 12.84% 34.04% 27.74%

Earnings & Valuation

This table compares Express Scripts and 1-800-PetMeds’ gross revenue, earnings per share 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
1-800-PetMeds $249.18 million 2.95 $23.81 million $1.17 30.51

Express Scripts has higher revenue and earnings than 1-800-PetMeds. Express Scripts is trading at a lower price-to-earnings ratio than 1-800-PetMeds, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and price targets for Express Scripts and 1-800-PetMeds, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Express Scripts 3 11 5 0 2.11
1-800-PetMeds 1 2 2 0 2.20

Express Scripts presently has a consensus price target of $81.82, indicating a potential upside of 11.34%. 1-800-PetMeds has a consensus price target of $41.00, indicating a potential upside of 14.85%. Given 1-800-PetMeds’ stronger consensus rating and higher probable upside, analysts clearly believe 1-800-PetMeds is more favorable than Express Scripts.

Institutional & Insider Ownership

89.3% of Express Scripts shares are owned by institutional investors. Comparatively, 90.7% of 1-800-PetMeds shares are owned by institutional investors. 0.8% of Express Scripts shares are owned by company insiders. Comparatively, 4.0% of 1-800-PetMeds shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

1-800-PetMeds beats Express Scripts on 10 of the 16 factors compared between the two stocks.

About Express Scripts

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.

About 1-800-PetMeds

PetMed Express, Inc. and its subsidiaries, doing business as 1-800-PetMeds, operates as a pet pharmacy in the United States. The company markets prescription and non-prescription pet medications, health products, and supplies for dogs and cats to retail customers. It provides non-prescription medications and supplies, such as flea and tick control products, bone and joint care products, vitamins, treats, nutritional supplements, hygiene products, and supplies; and prescription medications, including heartworm preventatives, flea and tick preventatives, arthritis, thyroid, diabetes, pain medications, antibiotics, and other specialty medications, as well as generic substitutes. The company also sells food, beds, crates, stairs, strollers, and other pet supplies through its Website. It markets its products through Internet; telephone contact center; and direct mail/print through 1-800-PetMeds catalogs, brochures, and postcards under various brands. PetMed Express, Inc. was founded in 1996 and is headquartered in Delray Beach, Florida.

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