Contrasting Embecta (NASDAQ:EMBC) & HealthEquity (NASDAQ:HQY)

Embecta (NASDAQ:EMBC) and HealthEquity (NASDAQ:HQY) are both medical companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, earnings, dividends and risk.

Insider & Institutional Ownership

93.8% of Embecta shares are held by institutional investors. Comparatively, 99.5% of HealthEquity shares are held by institutional investors. 1.3% of Embecta shares are held by insiders. Comparatively, 1.6% of HealthEquity shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of current ratings for Embecta and HealthEquity, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Embecta	3	2	0	0	1.40
HealthEquity	1	1	11	1	2.86

Embecta currently has a consensus price target of $11.00, suggesting a potential upside of 227.87%. HealthEquity has a consensus price target of $110.57, suggesting a potential upside of 12.98%. Given Embecta’s higher probable upside, equities research analysts clearly believe Embecta is more favorable than HealthEquity.

Profitability

This table compares Embecta and HealthEquity’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Embecta	10.73%	-23.96%	14.12%
HealthEquity	17.25%	14.75%	9.22%

Valuation and Earnings

This table compares Embecta and HealthEquity”s revenue, earnings per share (EPS) 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	1.77
HealthEquity	$1.31 billion	6.23	$215.20 million	$2.67	36.65

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

Volatility and Risk

Embecta has a beta of 0.83, meaning that its stock price is 17% less volatile than the S&P 500. Comparatively, HealthEquity has a beta of 0.21, meaning that its stock price is 79% less volatile than the S&P 500.

Summary

HealthEquity beats Embecta on 12 of the 15 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 HealthEquity

HealthEquity, Inc. provides technology-enabled services platforms to consumers and employers in the United States. The company offers cloud-based platforms for individuals to make health saving and spending decisions, pay healthcare bills, receive personalized benefit information, earn wellness incentives, grow their savings, and make investment choices; and health savings accounts. It also provides investment platform; and online-only automated investment advisory services through Advisor, a Web-based tool. In addition, the company offers flexible spending accounts; health reimbursement arrangements; and Consolidated Omnibus Budget Reconciliation Act continuation services, as well as administers pre-tax commuter benefit programs. It serves clients through a direct sales force; benefits brokers and advisors; and a network of health plans, benefits administrators, benefits brokers and consultants, and retirement plan record-keepers. HealthEquity, Inc. was incorporated in 2002 and is based in Draper, Utah.