Head to Head Survey: Express Scripts (ESRX) & Diplomat Pharmacy (DPLO)

Diplomat Pharmacy (NYSE: DPLO) and Express Scripts (NASDAQ:ESRX) are both retail/wholesale companies, but which is the superior business? We will compare the two businesses based on the strength of their earnings, dividends, risk, institutional ownership, profitability, analyst recommendations and valuation.

Volatility & Risk

Diplomat Pharmacy has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500. Comparatively, Express Scripts has a beta of 0.98, indicating that its share price is 2% less volatile than the S&P 500.

Insider and Institutional Ownership

64.3% of Diplomat Pharmacy shares are held by institutional investors. Comparatively, 88.2% of Express Scripts shares are held by institutional investors. 30.2% of Diplomat Pharmacy shares are held by insiders. Comparatively, 0.8% of Express Scripts shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Diplomat Pharmacy and Express Scripts’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Diplomat Pharmacy $4.49 billion 0.41 $15.51 million $0.84 29.20
Express Scripts $100.06 billion 0.41 $4.52 billion $7.10 10.39

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

Profitability

This table compares Diplomat Pharmacy and Express Scripts’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Diplomat Pharmacy 0.23% 8.80% 4.07%
Express Scripts 4.59% 25.41% 8.28%

Analyst Ratings

This is a summary of recent recommendations and price targets for Diplomat Pharmacy and Express Scripts, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Diplomat Pharmacy 0 5 6 0 2.55
Express Scripts 3 11 5 0 2.11

Diplomat Pharmacy presently has a consensus target price of $26.35, suggesting a potential upside of 7.42%. Express Scripts has a consensus target price of $82.39, suggesting a potential upside of 11.67%. Given Express Scripts’ higher possible upside, analysts plainly believe Express Scripts is more favorable than Diplomat Pharmacy.

Summary

Express Scripts beats Diplomat Pharmacy on 9 of the 14 factors compared between the two stocks.

Diplomat Pharmacy Company Profile

Diplomat Pharmacy, Inc. operates as an independent specialty pharmacy in the United States. The company stocks, dispenses, and distributes prescriptions for various biotechnology and specialty pharmaceutical manufacturers. It also provides specialty infusion pharmacy, patient care coordination, clinical, compliance and persistency program, patient financial assistance, specialty pharmacy training/consulting, benefits investigation, prior authorization, risk evaluation and medication strategy, retail specialty, and hub services, as well as clinical and administrative support services to hospitals and health systems. The company's primary focus is on medication management programs for individuals with complex chronic diseases, including oncology, immunology, hepatitis, multiple sclerosis, specialized infusion therapy, and various other serious or long-term conditions. The company was founded in 1975 and is headquartered in Flint, Michigan.

Express Scripts Company Profile

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.

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