Walgreens Boots Alliance (NASDAQ: WBA) and Express Scripts (NASDAQ:ESRX) are both large-cap retail/wholesale companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, institutional ownership, valuation, profitability, earnings and dividends.
Volatility and Risk
Walgreens Boots Alliance has a beta of 1.16, meaning that its share price is 16% more volatile than the S&P 500. Comparatively, Express Scripts has a beta of 0.99, meaning that its share price is 1% less volatile than the S&P 500.
60.9% of Walgreens Boots Alliance shares are held by institutional investors. Comparatively, 89.4% of Express Scripts shares are held by institutional investors. 14.8% of Walgreens Boots Alliance shares are held by insiders. Comparatively, 0.8% of Express Scripts shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.
Valuation and Earnings
This table compares Walgreens Boots Alliance and Express Scripts’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Walgreens Boots Alliance||$118.21 billion||0.54||$4.08 billion||$5.10||12.56|
|Express Scripts||$100.06 billion||0.40||$4.52 billion||$7.10||10.09|
Express Scripts has lower revenue, but higher earnings than Walgreens Boots Alliance. Express Scripts is trading at a lower price-to-earnings ratio than Walgreens Boots Alliance, indicating that it is currently the more affordable of the two stocks.
Walgreens Boots Alliance pays an annual dividend of $1.60 per share and has a dividend yield of 2.5%. Express Scripts does not pay a dividend. Walgreens Boots Alliance pays out 31.4% of its earnings in the form of a dividend.
This table compares Walgreens Boots Alliance and Express Scripts’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Walgreens Boots Alliance||3.33%||20.38%||8.42%|
This is a summary of current recommendations for Walgreens Boots Alliance and Express Scripts, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Walgreens Boots Alliance||0||9||11||0||2.55|
Walgreens Boots Alliance currently has a consensus target price of $83.17, suggesting a potential upside of 29.87%. Express Scripts has a consensus target price of $82.65, suggesting a potential upside of 15.42%. Given Walgreens Boots Alliance’s stronger consensus rating and higher probable upside, analysts plainly believe Walgreens Boots Alliance is more favorable than Express Scripts.
Walgreens Boots Alliance beats Express Scripts on 10 of the 16 factors compared between the two stocks.
Walgreens Boots Alliance Company Profile
Walgreens Boots Alliance, Inc. (Walgreens Boots Alliance) is a holding company. The Company is a global pharmacy-led, health and wellbeing enterprise. Walgreens Boots Alliance operates through three divisions, including Retail Pharmacy USA, Retail Pharmacy International and Pharmaceutical Wholesale. The Company’s products are marketed under a number of brands, which include No7, the Botanics range, Almus (generic medicines), Boots Pharmaceuticals and Soap & Glory (bathing and beauty brand). In addition, the Company has investments in Guangzhou Pharmaceuticals Corporation and Nanjing Pharmaceutical Company Limited. The Company operates in around 25 countries, which include the wholesale and distribution network with over 340 distribution centers and more than 180,000 pharmacies, health centers and hospitals in 19 countries.
Express Scripts Company Profile
Express Scripts Holding Company operates as a pharmacy benefit management (PBM) company in the United States and Canada. The company's PBM segment offers clinical solutions; and specialized pharmacy care, home delivery and specialty pharmacy, retail network pharmacy administration, benefit design consultation, drug utilization review, drug formulary management, public exchange, administration of group purchasing organization, and digital consumer health and drug information services. This segment also provides Medicare, Medicaid, and health insurance marketplace products; Express Scripts SafeGuardRx, a suite of solutions targeting the therapy classes that pose clinical challenges and budgetary threat to its clients; and Inside Rx, a program that provide affordable access to medication for uninsured and underinsured individuals. Its Other Business Operations segment distributes specialty pharmaceuticals and medical supplies, including injectable and infusible pharmaceuticals and medications to treat specialty and rare/orphan diseases. This segment also provides medical benefit management solutions for radiology, cardiology, musculoskeletal disorders, sleep disorders, post-acute care, genetic lab, specialty pharmacy, and medical oncology. The company serves managed care organizations, health insurers, third-party administrators, employers, union-sponsored benefit plans, workers' compensation plans, government health programs, providers, clinics, hospitals, and others. As of December 31, 2017, it operated 4 automated dispensing home delivery pharmacies; 1 non-automated dispensing home delivery pharmacy; 7 non-dispensing order processing centers; 5 patient contact centers; 9 specialty home delivery pharmacies; and 34 specialty branch pharmacies. The company was formerly known as Aristotle Holding, Inc. and changed its name to Express Scripts Holding Company in April 2012. Express Scripts Holding Company was founded in 1986 and is headquartered in Saint Louis, Missouri.
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