Financial Survey: Neogen (NASDAQ:NEOG) & Baxter International (NYSE:BAX)

Neogen (NASDAQ:NEOG) and Baxter International (NYSE:BAX) are both medical companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, risk, institutional ownership, valuation, analyst recommendations and dividends.

Institutional and Insider Ownership

96.7% of Neogen shares are held by institutional investors. Comparatively, 90.2% of Baxter International shares are held by institutional investors. 0.6% of Neogen shares are held by insiders. Comparatively, 0.2% of Baxter International shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent recommendations and price targets for Neogen and Baxter International, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Neogen	1	3	2	0	2.17
Baxter International	3	8	2	0	1.92

Neogen presently has a consensus target price of $10.67, suggesting a potential upside of 19.85%. Baxter International has a consensus target price of $19.73, suggesting a potential upside of 1.79%. Given Neogen’s stronger consensus rating and higher probable upside, research analysts plainly believe Neogen is more favorable than Baxter International.

Earnings and Valuation

This table compares Neogen and Baxter International”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Neogen	$894.66 million	2.17	-$1.09 billion	($2.80)	-3.18
Baxter International	$11.24 billion	0.89	-$957.00 million	($2.13)	-9.10

Baxter International has higher revenue and earnings than Neogen. Baxter International is trading at a lower price-to-earnings ratio than Neogen, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Neogen has a beta of 1.8, meaning that its share price is 80% more volatile than the S&P 500. Comparatively, Baxter International has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500.

Profitability

This table compares Neogen and Baxter International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Neogen	-69.93%	2.35%	1.46%
Baxter International	-9.70%	16.15%	5.24%

Summary

Neogen beats Baxter International on 7 of the 13 factors compared between the two stocks.

About Neogen

Neogen Corporation, together with its subsidiaries, engages in the development, manufacture, and marketing of various products and services dedicated to food and animal safety worldwide. It operates through two segments, Food Safety and Animal Safety. The Food Safety segment offers diagnostic test kits and related products to detect dangerous and unintended substances in food and animal feed, including foodborne pathogens, spoilage organisms, natural toxins, food allergens, genetic modifications, ruminant by-products, meat speciation, drug residues, pesticide residues, and general sanitation concerns; and AccuPoint Advanced rapid sanitation test to detect the presence of adenosine triphosphate, a chemical found in living cells, as well as provides genomics-based diagnostic technology and software systems that help testers to objectively analyze and store their results and perform analysis on the results from multiple locations over extended periods. The segment offers its products primarily to milling and grain, meat and poultry, prepared foods and ingredients, fruits and vegetables, seafood, dairy, beverage, water, healthcare, traditional culture media markets, food service, and dietary supplements markets. The Animal Safety segment provides veterinary instruments, pharmaceuticals, vaccines, topicals, parasiticides, diagnostic products, rodent control products, cleaners, disinfectants, insect control products, and genomics testing services marketed through veterinarians, retailers, livestock producers, and animal health product distributors, for the animal safety market. The segment offers its products for companion animal veterinarians; livestock producers, veterinarians, and breed associations; retailers; breeding and genetics companies; diagnostic labs and universities; distributors; and other manufacturers and government agencies. Neogen Corporation was incorporated in 1981 and is headquartered in Lansing, Michigan.

About Baxter International

Baxter International Inc., through its subsidiaries, develops and provides a portfolio of healthcare products worldwide. The company operates through four segments: Medical Products and Therapies, Healthcare Systems and Technologies, Pharmaceuticals, and Kidney Care. The company offers sterile intravenous (IV) solutions; infusion systems and devices; parenteral nutrition therapies; generic injectable pharmaceuticals; surgical hemostat and sealant products, advanced surgical equipment; smart bed systems; patient monitoring and diagnostic technologies; and respiratory health devices, as well as advanced equipment for the surgical space, including surgical video technologies, precision positioning devices, and other accessories. It also provides administrative sets; adhesion prevention products; inhaled anesthesia; drug compounding; chronic and acute dialysis therapies and services, including peritoneal dialysis (PD), hemodialysis (HD), continuous renal replacement therapies (CRRT), and other organ support therapies. The company’s products are used in hospitals, kidney dialysis centers, nursing homes, rehabilitation centers, ambulatory surgery centers, doctors’ offices, and patients at home under physician supervision. The company sells its products through direct sales force, as well as through independent distributors, drug wholesalers, and specialty pharmacy or other alternate site providers in approximately 100 countries. It has an agreement with Celerity Pharmaceutical, LLC to develop acute care generic injectable premix and oncolytic products; and a collaborative research agreement with Miromatrix Medical Inc. aiming to advance care for patients with acute liver failure. Baxter International Inc. was incorporated in 1931 and is headquartered in Deerfield, Illinois.