Critical Comparison: Icon (NASDAQ:ICLR) versus Avantor (NYSE:AVTR)

Avantor (NYSE:AVTR) and Icon (NASDAQ:ICLR) are both large-cap healthcare companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, risk, valuation, institutional ownership, profitability and dividends.

Analyst Recommendations

This is a summary of recent ratings for Avantor and Icon, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Avantor	1	15	2	0	2.06
Icon	2	7	7	1	2.41

Avantor presently has a consensus price target of $12.47, indicating a potential downside of 18.25%. Icon has a consensus price target of $170.07, indicating a potential downside of 1.31%. Given Icon’s stronger consensus rating and higher probable upside, analysts clearly believe Icon is more favorable than Avantor.

Profitability

This table compares Avantor and Icon’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Avantor	-8.81%	9.92%	4.75%
Icon	3.99%	8.02%	4.56%

Valuation and Earnings

This table compares Avantor and Icon”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Avantor	$6.56 billion	1.57	-$530.20 million	($0.84)	-18.16
Icon	$8.29 billion	1.59	$229.34 million	$4.26	40.45

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

Risk and Volatility

Avantor has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, Icon has a beta of 1.2, meaning that its stock price is 20% more volatile than the S&P 500.

Insider & Institutional Ownership

95.1% of Avantor shares are owned by institutional investors. Comparatively, 95.6% of Icon shares are owned by institutional investors. 0.3% of Avantor shares are owned by company insiders. Comparatively, 44.0% of Icon shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Icon beats Avantor on 13 of the 15 factors compared between the two stocks.

About Avantor

Avantor, Inc. engages in the provision of mission-critical products and services to customers in the biopharma, healthcare, education and government, advanced technologies, and applied materials industries in the Americas, Europe, Asia, the Middle East, and Africa. The company offers materials and consumables, such as purity chemicals and reagents, lab products and supplies, formulated silicone materials, customized excipients, customized single-use assemblies, process chromatography resins and columns, analytical sample prep kits, education and microbiology products, clinical trial kits, peristaltic pumps, and fluid handling tips. It also provides equipment and instrumentation products, including filtration systems, virus inactivation systems, incubators, analytical instruments, evaporators, ultra-low-temperature freezers, biological safety cabinets, and critical environment supplies. In addition, the company offers services and specialty procurements comprising onsite lab and production, clinical, equipment, procurement and sourcing, and biopharmaceutical material scale-up and development services. Further, it provides scientific research support services, such as DNA extraction, bioreactor servicing, clinical and biorepository, and compound management services. The company was founded in 1904 and is headquartered in Radnor, Pennsylvania.

About Icon

ICON Public Limited Company, a clinical research organization, provides outsourced development and commercialization services in Ireland, rest of Europe, the United States, and internationally. The company specializes in the strategic development, management, and analysis of programs that support various stages of the clinical development process from compound selection to Phase I-IV clinical studies. It also offers clinical development services, including all phases of development, peri and post approval, data solutions, and site and patient access services; clinical trial management, consulting, and contract staffing services; and commercial services comprising clinical development strategy, planning and trial design, full study execution, and post-market commercialization. In addition, the company provides laboratory services, including bionanalytical, biomarker, vaccine, good manufacturing practice, and central laboratory services, as well as full-service and functional service partnerships to customers. Further, it offers adaptive trials, cardiac safety solutions, clinical and scientific operations, consulting and advisory, commercial positioning, decentralized and hybrid clinical trials, early clinical, laboratories, language services, medical imaging, real world intelligence, site and patient, and strategic solutions. The company serves pharmaceutical, biotechnology, and medical device industries, as well as government and public health organizations. ICON Public Limited Company was incorporated in 1990 and is headquartered in Dublin, Ireland.