AmerisourceBergen (NYSE: ABC) and Herbal Center (NYSE:HLF) are both medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, dividends, risk, earnings, profitability, analyst recommendations and valuation.

Analyst Ratings

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This is a breakdown of current recommendations for AmerisourceBergen and Herbal Center, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AmerisourceBergen 0 6 10 0 2.63
Herbal Center 0 1 4 0 2.80

AmerisourceBergen currently has a consensus target price of $103.07, indicating a potential upside of 16.11%. Herbal Center has a consensus target price of $103.75, indicating a potential upside of 2.26%. Given AmerisourceBergen’s higher probable upside, research analysts plainly believe AmerisourceBergen is more favorable than Herbal Center.

Dividends

AmerisourceBergen pays an annual dividend of $1.52 per share and has a dividend yield of 1.7%. Herbal Center does not pay a dividend. AmerisourceBergen pays out 25.9% of its earnings in the form of a dividend. AmerisourceBergen has raised its dividend for 13 consecutive years.

Earnings and Valuation

This table compares AmerisourceBergen and Herbal Center’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AmerisourceBergen $153.14 billion 0.13 $364.48 million $5.88 15.10
Herbal Center $4.43 billion 2.00 $213.90 million $4.86 20.88

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

Volatility & Risk

AmerisourceBergen has a beta of 1.06, meaning that its share price is 6% more volatile than the S&P 500. Comparatively, Herbal Center has a beta of 1.2, meaning that its share price is 20% more volatile than the S&P 500.

Profitability

This table compares AmerisourceBergen and Herbal Center’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AmerisourceBergen 0.66% 53.65% 3.82%
Herbal Center 4.83% 457.78% 12.12%

Insider & Institutional Ownership

66.9% of AmerisourceBergen shares are held by institutional investors. Comparatively, 99.5% of Herbal Center shares are held by institutional investors. 27.3% of AmerisourceBergen shares are held by company insiders. Comparatively, 6.2% of Herbal Center shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Summary

Herbal Center beats AmerisourceBergen on 9 of the 17 factors compared between the two stocks.

About AmerisourceBergen

AmerisourceBergen Corporation sources and distributes pharmaceutical products in the United States and internationally. Its Pharmaceutical Distribution segment distributes brand-name and generic pharmaceuticals, over-the-counter healthcare products, home healthcare supplies and equipment, outsourced compounded sterile preparations, and related services to various healthcare providers, including acute care hospitals and health systems, independent and chain retail pharmacies, mail order pharmacies, medical clinics, long-term care and other alternate site pharmacies, and other customers. It also provides pharmacy management, staffing, and other consulting services; supply management software to retail and institutional healthcare providers; and packaging solutions to various institutional and retail healthcare providers. In addition, this segment provides pharmaceutical distribution and other services primarily to physicians who specialize in various disease states, primarily oncology, as well as to other healthcare providers, including hospitals and dialysis clinics; distributes plasma and other blood products, injectable pharmaceuticals, vaccines, and other specialty products; and offers third party logistics and outcomes research, and other services for biotechnology and other pharmaceutical manufacturers. The company's Other segment provides commercialization support services, including reimbursement support programs, outcomes research, contract field staffing, patient assistance and co-pay assistance programs, adherence programs, risk mitigation services, and other market access programs to pharmaceutical and biotechnology manufacturers; specialty transportation and logistics services for the biopharmaceutical industry; and animal health care products. It markets its products and services through independent sales forces and marketing organizations. AmerisourceBergen Corporation was founded in 1985 and is headquartered in Chesterbrook, Pennsylvania.

About Herbal Center

Herbalife Ltd. develops and sells nutrition solutions in North America, Mexico, South and Central America, Europe, the Middle East, Africa, and the Asia Pacific. It provides science-based products in the areas of weight management; targeted nutrition; energy, sports, and fitness; and outer nutrition. The company offers weight management products, including meal replacement products, protein shakes, drink mixes, weight loss enhancers, and healthy snacks; targeted nutrition products comprising dietary and nutritional supplements that contain herbs, vitamins, minerals, and other natural ingredients; outer nutrition products consisting of facial skin, body, and hair care products; and energy, sports, and fitness products, such as N-R-G tea and energy drink products. It also provides literature, promotional, and other materials, including start-up kits, sales tools, and educational materials. The company offers its products through own retail stores, as well as through independent service providers, sales representatives, and sales officers. Herbalife Ltd. was founded in 1980 and is headquartered in Los Angeles, California.

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