Critical Review: Qiagen (NYSE:QGEN) & Pacific Biosciences of California (NASDAQ:PACB)

Qiagen (NYSE:QGEN) and Pacific Biosciences of California (NASDAQ:PACB) are both healthcare companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, earnings, analyst recommendations, institutional ownership, dividends, valuation and risk.

Institutional & Insider Ownership

70.0% of Qiagen shares are owned by institutional investors. 9.0% of Qiagen shares are owned by company insiders. Comparatively, 3.7% of Pacific Biosciences of California shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

This table compares Qiagen and Pacific Biosciences of California’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Qiagen	19.49%	14.24%	8.23%
Pacific Biosciences of California	-82.49%	-1,043.14%	-19.28%

Analyst Recommendations

This is a summary of current ratings and target prices for Qiagen and Pacific Biosciences of California, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Qiagen	1	8	4	1	2.36
Pacific Biosciences of California	2	2	1	0	1.80

Qiagen currently has a consensus target price of $43.93, suggesting a potential upside of 3.44%. Pacific Biosciences of California has a consensus target price of $1.83, suggesting a potential upside of 67.43%. Given Pacific Biosciences of California’s higher probable upside, analysts plainly believe Pacific Biosciences of California is more favorable than Qiagen.

Risk and Volatility

Qiagen has a beta of 0.63, meaning that its stock price is 37% less volatile than the S&P 500. Comparatively, Pacific Biosciences of California has a beta of 2.31, meaning that its stock price is 131% more volatile than the S&P 500.

Earnings and Valuation

This table compares Qiagen and Pacific Biosciences of California”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Qiagen	$2.10 billion	4.17	$424.88 million	$1.95	21.78
Pacific Biosciences of California	$159.27 million	2.14	-$546.38 million	($0.43)	-2.55

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

Summary

Qiagen beats Pacific Biosciences of California on 13 of the 15 factors compared between the two stocks.

About Qiagen

QIAGEN NV is a holding company, which engages in the provision of Sample to Insight solutions that enable customers to gain valuable molecular insights from samples containing the building blocks of life. The company sample technologies isolate and process DNA, RNA, and proteins from blood, tissue, and other materials. The firm assay technologies make these biomolecules visible and ready for analysis. Its bioinformatics software and knowledge bases interpret data to report relevant, actionable insights. The company was founded by Detlev H. Riesner and Metin Colpan on April 29, 1996, and is headquartered in Venlo, the Netherlands.

About Pacific Biosciences of California

Pacific Biosciences of California, Inc. designs, develops, and manufactures sequencing solution to resolve genetically complex problems. The company provides sequencing systems; consumable products, including single molecule real-time (SMRT) technology; long-red sequencing; and various reagent kits designed for specific workflow, such as preparation kit to convert DNA into SMRTbell double-stranded DNA library formats, including molecular biology reagents, such as ligase, buffers, and exonucleases. It also offers binding kits, such as modified DNA polymerase used to bind SMRTbell libraries to the polymerase in preparation for sequencing; and sequencing kits comprise reagents required for on-instrument, real-time sequencing, including the phospholinked nucleotides. In addition, it provides revio system + sequel systems which conduct, monitor, and analyze single-molecule biochemical reactions in real time; SBB short-read sequencing; onso instrument conducts, monitors, and analyzes SBB biochemical reactions; and SBB consumable, including flow cells, clustering, and sequencing reagent kits. The company serves academic and governmental research institutions; commercial testing and service laboratories; genome centers; public health labs, hospitals and clinical research institutes, and contract research organizations; pharmaceutical companies; and agricultural companies. It markets its products through a sales force and distribution partners in Asia, Australia, Europe, the Middle East, Africa, and Latin America. It has a development and commercialization agreement with Invitae Corporation; and a collaboration with Radboud University Medical to explore genetic causes of rare and genetic diseases. The company was formerly known as Nanofluidics, Inc. and changed its name to Pacific Biosciences of California, Inc. in 2005. Pacific Biosciences of California, Inc. was incorporated in 2000 and is headquartered in Menlo Park, California.