Omnicell (NASDAQ:OMCL) vs. Baxter International (NYSE:BAX) Critical Analysis

Omnicell (NASDAQ:OMCL) and Baxter International (NYSE:BAX) are both healthcare companies, but which is the superior business? We will contrast the two companies based on the strength of their earnings, analyst recommendations, risk, valuation, institutional ownership, profitability and dividends.

Risk and Volatility

Omnicell has a beta of 0.98, meaning that its stock price is 2% less volatile than the S&P 500. Comparatively, Baxter International has a beta of 0.65, meaning that its stock price is 35% less volatile than the S&P 500.

Profitability

This table compares Omnicell and Baxter International’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Omnicell	3.13%	5.66%	3.57%
Baxter International	-9.27%	16.57%	5.24%

Insider & Institutional Ownership

97.7% of Omnicell shares are owned by institutional investors. Comparatively, 90.2% of Baxter International shares are owned by institutional investors. 2.9% of Omnicell shares are owned by company insiders. Comparatively, 0.2% of Baxter International shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent ratings for Omnicell and Baxter International, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Omnicell	0	2	7	0	2.78
Baxter International	3	9	1	0	1.85

Omnicell presently has a consensus price target of $57.86, indicating a potential upside of 64.32%. Baxter International has a consensus price target of $21.73, indicating a potential downside of 9.30%. Given Omnicell’s stronger consensus rating and higher probable upside, research analysts clearly believe Omnicell is more favorable than Baxter International.

Earnings and Valuation

This table compares Omnicell and Baxter International”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Omnicell	$1.18 billion	1.35	$2.05 million	$0.84	41.92
Baxter International	$11.24 billion	1.10	-$957.00 million	($2.07)	-11.57

Omnicell has higher earnings, but lower revenue than Baxter International. Baxter International is trading at a lower price-to-earnings ratio than Omnicell, indicating that it is currently the more affordable of the two stocks.

Summary

Omnicell beats Baxter International on 11 of the 14 factors compared between the two stocks.

About Omnicell

Omnicell, Inc., together with its subsidiaries, provides medication management solutions and adherence tools for healthcare systems and pharmacies the United States and internationally. The company offers point of care automation solutions to improve clinician workflows in patient care areas of the healthcare system; XT Series automated dispensing systems for medications and supplies used in nursing units and other clinical areas of the hospital, as well as specialized automated dispensing systems for operating room; and robotic dispensing systems for handling the stocking and retrieval of boxed medications. It also provides central pharmacy automation solutions; IV compounding robots; and inventory management software. In addition, the company provides single-dose automation solutions that fill and label a variety of patient-specific, single-dose medication blister packaging based on incoming prescriptions; fully automated and semi-automated filling equipment for institutional pharmacies to warrant automated packaging of medications; and medication blister card packaging and packaging supplies to enhance medication adherence in non-acute care settings. Further, it offers EnlivenHealth Patient Engagement, a web-based solutions. The company was formerly known as Omnicell Technologies, Inc. and changed its name to Omnicell, Inc. in 2001. Omnicell, Inc. was incorporated in 1992 and is headquartered in Fort Worth, Texas.

About Baxter International

Baxter International Inc., through its subsidiaries, develops and provides a portfolio of healthcare products worldwide. The company operates through four segments: Medical Products and Therapies, Healthcare Systems and Technologies, Pharmaceuticals, and Kidney Care. The company offers sterile intravenous (IV) solutions; infusion systems and devices; parenteral nutrition therapies; generic injectable pharmaceuticals; surgical hemostat and sealant products, advanced surgical equipment; smart bed systems; patient monitoring and diagnostic technologies; and respiratory health devices, as well as advanced equipment for the surgical space, including surgical video technologies, precision positioning devices, and other accessories. It also provides administrative sets; adhesion prevention products; inhaled anesthesia; drug compounding; chronic and acute dialysis therapies and services, including peritoneal dialysis (PD), hemodialysis (HD), continuous renal replacement therapies (CRRT), and other organ support therapies. The company’s products are used in hospitals, kidney dialysis centers, nursing homes, rehabilitation centers, ambulatory surgery centers, doctors’ offices, and patients at home under physician supervision. The company sells its products through direct sales force, as well as through independent distributors, drug wholesalers, and specialty pharmacy or other alternate site providers in approximately 100 countries. It has an agreement with Celerity Pharmaceutical, LLC to develop acute care generic injectable premix and oncolytic products; and a collaborative research agreement with Miromatrix Medical Inc. aiming to advance care for patients with acute liver failure. Baxter International Inc. was incorporated in 1931 and is headquartered in Deerfield, Illinois.