Comparing Organon & Co. (NYSE:OGN) & Labcorp (NYSE:LH)

Labcorp (NYSE:LH) and Organon & Co. (NYSE:OGN) are both medical companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, earnings, valuation, risk, analyst recommendations, profitability and institutional ownership.

Analyst Ratings

This is a summary of current ratings and price targets for Labcorp and Organon & Co., as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Labcorp	0	3	10	0	2.77
Organon & Co.	5	1	0	1	1.57

Labcorp currently has a consensus target price of $304.42, indicating a potential upside of 7.51%. Organon & Co. has a consensus target price of $8.50, indicating a potential upside of 23.19%. Given Organon & Co.’s higher probable upside, analysts plainly believe Organon & Co. is more favorable than Labcorp.

Earnings & Valuation

This table compares Labcorp and Organon & Co.”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Labcorp	$13.95 billion	1.67	$876.50 million	$10.46	27.07
Organon & Co.	$6.22 billion	0.29	$187.00 million	$0.71	9.72

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

Volatility and Risk

Labcorp has a beta of 1.01, indicating that its share price is 1% more volatile than the S&P 500. Comparatively, Organon & Co. has a beta of 0.6, indicating that its share price is 40% less volatile than the S&P 500.

Profitability

This table compares Labcorp and Organon & Co.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Labcorp	6.28%	16.16%	7.62%
Organon & Co.	3.01%	122.01%	6.74%

Insider & Institutional Ownership

95.9% of Labcorp shares are held by institutional investors. Comparatively, 77.4% of Organon & Co. shares are held by institutional investors. 0.8% of Labcorp shares are held by insiders. Comparatively, 1.4% of Organon & Co. shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Labcorp pays an annual dividend of $2.88 per share and has a dividend yield of 1.0%. Organon & Co. pays an annual dividend of $0.08 per share and has a dividend yield of 1.2%. Labcorp pays out 27.5% of its earnings in the form of a dividend. Organon & Co. pays out 11.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Organon & Co. is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Labcorp beats Organon & Co. on 11 of the 17 factors compared between the two stocks.

About Labcorp

Labcorp Holdings, Inc. engages in providing medical testing services. The company was founded on April 16, 2024 and is headquartered in Burlington, NC.

About Organon & Co.

Organon & Co. is a science based global pharmaceutical company, which develops and delivers innovative health solutions through a portfolio of prescription therapies within women’s health, biosimilars and established brands. The company was founded on March 11, 2020, and is headquartered in Jersey City, NJ.