Contrasting West Pharmaceutical Services (NYSE:WST) & STAAR Surgical (NASDAQ:STAA)

STAAR Surgical (NASDAQ:STAA) and West Pharmaceutical Services (NYSE:WST) are both medical companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, dividends, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Profitability

This table compares STAAR Surgical and West Pharmaceutical Services’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
STAAR Surgical	-42.45%	-16.11%	-12.54%
West Pharmaceutical Services	16.48%	18.43%	13.67%

Risk & Volatility

STAAR Surgical has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500. Comparatively, West Pharmaceutical Services has a beta of 1.05, meaning that its share price is 5% more volatile than the S&P 500.

Insider & Institutional Ownership

96.7% of STAAR Surgical shares are owned by institutional investors. Comparatively, 93.9% of West Pharmaceutical Services shares are owned by institutional investors. 0.6% of STAAR Surgical shares are owned by company insiders. Comparatively, 0.5% of West Pharmaceutical Services shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and price targets for STAAR Surgical and West Pharmaceutical Services, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
STAAR Surgical	0	10	0	0	2.00
West Pharmaceutical Services	0	2	6	1	2.89

STAAR Surgical presently has a consensus target price of $20.67, suggesting a potential downside of 24.88%. West Pharmaceutical Services has a consensus target price of $320.71, suggesting a potential upside of 30.28%. Given West Pharmaceutical Services’ stronger consensus rating and higher probable upside, analysts plainly believe West Pharmaceutical Services is more favorable than STAAR Surgical.

Earnings and Valuation

This table compares STAAR Surgical and West Pharmaceutical Services”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
STAAR Surgical	$313.90 million	4.34	-$20.21 million	($1.93)	-14.25
West Pharmaceutical Services	$2.89 billion	6.12	$492.70 million	$6.68	36.85

West Pharmaceutical Services has higher revenue and earnings than STAAR Surgical. STAAR Surgical is trading at a lower price-to-earnings ratio than West Pharmaceutical Services, indicating that it is currently the more affordable of the two stocks.

Summary

West Pharmaceutical Services beats STAAR Surgical on 13 of the 15 factors compared between the two stocks.

About STAAR Surgical

STAAR Surgical Company, together with its subsidiaries, designs, develops, manufactures, markets, and sells implantable lenses for the eye, and companion delivery systems to deliver the lenses into the eye. The company provides implantable Collamer lens product family (ICLs) to treat visual disorders, such as myopia, hyperopia, astigmatism, and presbyopia. It markets its products to health care providers, including ophthalmic surgeons, vision and surgical centers, hospitals, government facilities, and distributors, as well as products are primarily used by ophthalmologists. The company sells its products directly through its sales representatives in the United States, Japan, Germany, Spain, Canada, the United Kingdom, and Singapore, as well as through own representatives and independent distributors in China, Korea, India, France, Benelux, Italy, and internationally. STAAR Surgical Company was incorporated in 1982 and is headquartered in Lake Forest, California.

About West Pharmaceutical Services

West Pharmaceutical Services, Inc. designs, manufactures, and sells containment and delivery systems for injectable drugs and healthcare products in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates in two segments, Proprietary Products and Contract-Manufactured Products. The Proprietary Products segment offers stoppers and seals for injectable packaging systems; syringe and cartridge components, including custom solutions for the needs of injectable drug applications, as well as administration systems that enhance the safe delivery of drugs through advanced reconstitution, mixing, and transfer technologies; and films, coatings, washing, and vision inspection and sterilization processes and services to enhance the quality of packaging components. This segment also provides drug containment solutions, including Crystal Zenith, a cyclic olefin polymer in the form of vials, syringes, and cartridges; and self-injection devices; and a range of integrated solutions, including analytical lab services, pre-approval primary packaging support and engineering development, regulatory expertise, and after-sales technical support. This segment serves biologic, generic, and pharmaceutical drug companies. The Contract-Manufactured Products segment is involved in the design, manufacture, and automated assembly of devices used in surgical, diagnostic, ophthalmic, injectable, and other drug delivery systems, as well as consumer products. The company serves pharmaceutical, diagnostic, and medical device companies. It sells and distributes its products through its sales force and distribution network, contract sales agents, and regional distributors. West Pharmaceutical Services, Inc. was founded in 1923 and is headquartered in Exton, Pennsylvania.