Henry Schein (NASDAQ:HSIC) and Cardinal Health (NYSE:CAH) Critical Review
by Sarita Garza · The Markets DailyCardinal Health (NYSE:CAH – Get Free Report) and Henry Schein (NASDAQ:HSIC – Get Free Report) are both medical companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitability, institutional ownership, valuation and analyst recommendations.
Analyst Recommendations
This is a summary of current recommendations and price targets for Cardinal Health and Henry Schein, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Cardinal Health | 0 | 3 | 13 | 0 | 2.81 |
| Henry Schein | 1 | 7 | 6 | 0 | 2.36 |
Cardinal Health currently has a consensus price target of $209.00, indicating a potential upside of 0.70%. Henry Schein has a consensus price target of $76.92, indicating a potential upside of 0.94%. Given Henry Schein’s higher probable upside, analysts plainly believe Henry Schein is more favorable than Cardinal Health.
Profitability
This table compares Cardinal Health and Henry Schein’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Cardinal Health | 0.68% | -84.37% | 4.19% |
| Henry Schein | 3.02% | 14.76% | 5.56% |
Risk and Volatility
Cardinal Health has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500. Comparatively, Henry Schein has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500.
Valuation & Earnings
This table compares Cardinal Health and Henry Schein”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Cardinal Health | $222.58 billion | 0.22 | $1.56 billion | $6.63 | 31.30 |
| Henry Schein | $12.67 billion | 0.71 | $390.00 million | $3.16 | 24.12 |
Cardinal Health has higher revenue and earnings than Henry Schein. Henry Schein is trading at a lower price-to-earnings ratio than Cardinal Health, indicating that it is currently the more affordable of the two stocks.
Institutional and Insider Ownership
87.2% of Cardinal Health shares are held by institutional investors. Comparatively, 96.6% of Henry Schein shares are held by institutional investors. 0.1% of Cardinal Health shares are held by insiders. Comparatively, 1.1% of Henry Schein shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Summary
Henry Schein beats Cardinal Health on 8 of the 14 factors compared between the two stocks.
About Cardinal Health
Cardinal Health, Inc. operates as a healthcare services and products company in the United States, Canada, Europe, Asia, and internationally. It provides customized solutions for hospitals, healthcare systems, pharmacies, ambulatory surgery centers, clinical laboratories, physician offices, and patients in the home. The company operates in two segments, Pharmaceutical and Medical. The Pharmaceutical segment distributes branded and generic pharmaceutical, specialty pharmaceutical, and over-the-counter healthcare and consumer products. The segment also provides services to pharmaceutical manufacturers and healthcare providers for specialty pharmaceutical products; operates nuclear pharmacies and radiopharmaceutical manufacturing facilities; repackages generic pharmaceuticals and over-the-counter healthcare products; and provides pharmacy management services to hospitals. The Medical segment manufactures, sources, and distributes Cardinal Health branded medical, surgical, and laboratory products and devices that include exam and surgical gloves; needles, syringe, and sharps disposals; compressions; incontinences; nutritional delivery products; wound care products; single-use surgical drapes, gowns, and apparels; fluid suction and collection systems; urology products; operating room supply products; and electrode product lines. The segment also distributes a range of national brand products, including medical, surgical, and laboratory products; provides supply chain services and solutions to hospitals, ambulatory surgery centers, clinical laboratories, and other healthcare providers; and assembles and sells sterile, and non-sterile procedure kits. The company was incorporated in 1979 and is headquartered in Dublin, Ohio.
About Henry Schein
Henry Schein, Inc. provides health care products and services to dental practitioners, laboratories, physician practices, and ambulatory surgery centers, government, institutional health care clinics, and other alternate care clinics worldwide. It operates through two segments, Health Care Distribution, and Technology and Value-Added Services. The Health Care Distribution segment offers dental products, including infection-control products, handpieces, preventatives, impression materials, composites, anesthetics, teeth, dental implants, gypsum, acrylics, articulators, abrasives, dental chairs, delivery units and lights, X-ray supplies and equipment, personal protective equipment, and high-tech and digital restoration equipment, as well as equipment repair services. This segment also provides medical products, such as branded and generic pharmaceuticals, vaccines, surgical products, diagnostic tests, infection-control products, X-ray products, equipment, and vitamins. The Technology and Value-Added Services segment offers software, technology, and other value-added services that include practice management software systems for dental and medical practitioners; and value-added practice solutions comprising practice consultancy, education, revenue cycle management and financial services, e-services, practice technology, and network and hardware services, as well as consulting, and continuing education services. Henry Schein, Inc. was founded in 1932 and is headquartered in Melville, New York.