Analyzing Embecta (NASDAQ:EMBC) & DexCom (NASDAQ:DXCM)

Embecta (NASDAQ:EMBC) and DexCom (NASDAQ:DXCM) are both healthcare companies, but which is the superior stock? We will contrast the two companies based on the strength of their dividends, profitability, valuation, institutional ownership, risk, earnings and analyst recommendations.

Analyst Recommendations

This is a breakdown of current recommendations for Embecta and DexCom, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Embecta	2	3	0	0	1.60
DexCom	0	2	19	3	3.04

Embecta currently has a consensus target price of $11.00, suggesting a potential upside of 64.67%. DexCom has a consensus target price of $92.43, suggesting a potential upside of 15.17%. Given Embecta’s higher probable upside, research analysts clearly believe Embecta is more favorable than DexCom.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Embecta	8.59%	-19.25%	10.82%
DexCom	20.12%	35.94%	14.75%

Insider and Institutional Ownership

93.8% of Embecta shares are owned by institutional investors. Comparatively, 97.8% of DexCom shares are owned by institutional investors. 1.3% of Embecta shares are owned by company insiders. Comparatively, 0.3% of DexCom shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Embecta has a beta of 0.84, indicating that its stock price is 16% less volatile than the S&P 500. Comparatively, DexCom has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500.

Earnings & Valuation

This table compares Embecta and DexCom”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Embecta	$1.08 billion	0.35	$95.40 million	$1.48	4.51
DexCom	$4.97 billion	6.09	$836.30 million	$2.53	31.72

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

Summary

DexCom beats Embecta on 13 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 DexCom

DexCom, Inc., a medical device company, focuses on the design, development, and commercialization of continuous glucose monitoring (CGM) systems in the United States and internationally. The company provides its systems for use by people with diabetes, as well as for use by healthcare providers. Its products include Dexcom G6 and Dexcom G7, integrated CGM systems for diabetes management; Dexcom Share, a remote monitoring system; Dexcom Real-Time API, which enables authorized third-party software developers to integrate real-time CGM data into their digital health apps and devices; and Dexcom ONE, that is designed to replace finger stick blood glucose testing for diabetes treatment decisions. It has also submitted FDA review for Dexcom Stelo for people with type 2 diabetes. The company has a collaboration and license agreement with Verily Life Sciences LLC and Verily Ireland Limited to develop blood-based or interstitial glucose monitoring products. It markets its products directly to endocrinologists, physicians, and diabetes educators. The company was incorporated in 1999 and is headquartered in San Diego, California.