Critical Contrast: Embecta (NASDAQ:EMBC) versus AMN Healthcare Services (NYSE:AMN)

Embecta (NASDAQ:EMBC) and AMN Healthcare Services (NYSE:AMN) are both small-cap medical companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, earnings, dividends, valuation and profitability.

Institutional and Insider Ownership

93.8% of Embecta shares are owned by institutional investors. Comparatively, 99.2% of AMN Healthcare Services shares are owned by institutional investors. 1.3% of Embecta shares are owned by insiders. Comparatively, 1.1% of AMN Healthcare Services shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Embecta and AMN Healthcare Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Embecta	10.73%	-23.96%	14.12%
AMN Healthcare Services	-0.95%	18.01%	5.19%

Dividends

Embecta pays an annual dividend of $0.04 per share and has a dividend yield of 1.2%. AMN Healthcare Services pays an annual dividend of $1.20 per share and has a dividend yield of 4.1%. Embecta pays out 2.1% of its earnings in the form of a dividend. AMN Healthcare Services pays out -137.9% 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. AMN Healthcare Services is clearly the better dividend stock, given its higher yield and lower payout ratio.

Volatility and Risk

Embecta has a beta of 1.09, suggesting that its stock price is 9% more volatile than the S&P 500. Comparatively, AMN Healthcare Services has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500.

Earnings and Valuation

This table compares Embecta and AMN Healthcare Services”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Embecta	$1.04 billion	0.19	$95.40 million	$1.90	1.79
AMN Healthcare Services	$3.42 billion	0.33	-$95.70 million	($0.87)	-33.94

Embecta has higher earnings, but lower revenue than AMN Healthcare Services. AMN Healthcare Services is trading at a lower price-to-earnings ratio than Embecta, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings for Embecta and AMN Healthcare Services, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Embecta	2	2	0	0	1.50
AMN Healthcare Services	2	2	4	1	2.44

Embecta presently has a consensus target price of $15.00, suggesting a potential upside of 339.88%. AMN Healthcare Services has a consensus target price of $23.50, suggesting a potential downside of 20.41%. Given Embecta’s higher probable upside, analysts clearly believe Embecta is more favorable than AMN Healthcare Services.

Summary

AMN Healthcare Services beats Embecta on 9 of the 17 factors compared between the two stocks.

About Embecta

Embecta Corp., a medical device company, focuses on the provision of various solutions to enhance the health and wellbeing of people living with diabetes. Its products include pen needles, syringes, and safety injection devices, as well as digital applications to assist people with managing patient's diabetes. The company primarily sells its products to wholesalers and distributors in the United States and internationally. Embecta Corp. was founded in 1924 and is headquartered in Parsippany, New Jersey.

About AMN Healthcare Services

AMN Healthcare Services, Inc. provides healthcare workforce solutions and staffing services to healthcare facilities in the United States. It operates through three segments: Nurse and Allied Solutions, Physician and Leadership Solutions, and Technology and Workforce Solutions. The Nurse and Allied Solutions segment offers travel nurse staffing, labor disruption staffing, local staffing, international nurse and allied permanent placement, and allied staffing solutions. The Physician and Leadership Solutions segment provides locum tenens staffing, healthcare interim leadership staffing, executive search, and physician permanent placement solutions. The Technology and Workforce Solutions segment offers language services, vendor management systems, workforce optimization, and outsourced solutions. The company also provides allied health professionals, such as physical therapists, respiratory therapists, occupational therapists, medical and radiology technologists, lab technicians, speech pathologists, rehabilitation assistants, and pharmacists. It offers its services under the brands, including AMN Healthcare, Nursefinders, HealthSource Global Staffing, O'Grady Peyton International, Connetics, Medical Search International, DRW Healthcare Staffing, and B.E. Smith. AMN Healthcare Services, Inc. was founded in 1985 and is headquartered in Dallas, Texas.