Koninklijke Philips (NYSE: PHG) and Agilent Technologies (NYSE:A) are both large-cap healthcare companies, but which is the superior stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, risk, dividends, institutional ownership, earnings and profitability.

Dividends

Koninklijke Philips pays an annual dividend of $0.73 per share and has a dividend yield of 1.8%. Agilent Technologies pays an annual dividend of $0.60 per share and has a dividend yield of 0.8%. Koninklijke Philips pays out 62.9% of its earnings in the form of a dividend. Agilent Technologies pays out 28.7% 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. Koninklijke Philips has increased its dividend for 5 consecutive years and Agilent Technologies has increased its dividend for 2 consecutive years. Koninklijke Philips is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Koninklijke Philips has a beta of 1.38, meaning that its share price is 38% more volatile than the S&P 500. Comparatively, Agilent Technologies has a beta of 1.28, meaning that its share price is 28% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for Koninklijke Philips and Agilent Technologies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Koninklijke Philips 0 6 2 0 2.25
Agilent Technologies 0 3 10 0 2.77

Koninklijke Philips currently has a consensus price target of $37.00, indicating a potential downside of 7.20%. Agilent Technologies has a consensus price target of $69.90, indicating a potential downside of 2.60%. Given Agilent Technologies’ stronger consensus rating and higher probable upside, analysts clearly believe Agilent Technologies is more favorable than Koninklijke Philips.

Institutional and Insider Ownership

7.2% of Koninklijke Philips shares are held by institutional investors. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Koninklijke Philips and Agilent Technologies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Koninklijke Philips 6.67% 7.19% 3.14%
Agilent Technologies 15.30% 16.95% 9.43%

Earnings and Valuation

This table compares Koninklijke Philips and Agilent Technologies’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Koninklijke Philips $27.13 billion 1.38 $1.60 billion $1.16 34.37
Agilent Technologies $4.47 billion 5.18 $684.00 million $2.09 34.34

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

Summary

Agilent Technologies beats Koninklijke Philips on 9 of the 16 factors compared between the two stocks.

About Koninklijke Philips

Koninklijke Philips N.V. is the Netherlands-based health technology company. The Company’s segments include Personal Health businesses, Diagnosis & Treatment businesses, Connected Care & Health Informatics businesses, HealthTech Other and Legacy Items. The Personal Health businesses segment is engaged in the health continuum, delivering integrated, connected solutions that support healthier lifestyles and those living with chronic disease. The Diagnosis & Treatment businesses segment delivers precision medicine and treatment, and therapy. The Connected Care & Health Informatics businesses segment provides consumers, care givers and clinicians with digital solutions that facilitate care by enabling precision medicine and population health management. The HealthTech Other segment comprises such items, as innovation, emerging businesses, royalties, among others. The Legacy Items segment consists mainly of separation costs, legacy legal items, legacy pension costs, among others.

About Agilent Technologies

Agilent Technologies, Inc. provides application focused solutions that include instruments, software, services and consumables for the entire laboratory workflow. The Company serves the life sciences, diagnostics and applied chemical markets. It has three business segments: life sciences and applied markets business, diagnostics and genomics business, and Agilent CrossLab business. Its life sciences and applied markets business segment offers instruments and software that enable customers to identify, quantify and analyze the physical and biological properties of substances and products, as well as enable customers in the clinical and life sciences research areas to interrogate samples at the molecular level. Its diagnostics and genomics business segment includes the reagent partnership, pathology, companion diagnostics, genomics and the nucleic acid solutions businesses. Its Agilent CrossLab business segment spans the entire lab with its consumables and services portfolio.

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