Financial Contrast: Aceto (ACET) & PetIQ (PETQ)

Aceto (NASDAQ: ACET) and PetIQ (NASDAQ:PETQ) are both small-cap medical companies, but which is the better business? We will contrast the two companies based on the strength of their risk, analyst recommendations, earnings, institutional ownership, valuation, dividends and profitability.

Analyst Recommendations

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This is a breakdown of recent ratings and price targets for Aceto and PetIQ, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Aceto	2	0	0	0	1.00
PetIQ	0	0	6	0	3.00

Aceto presently has a consensus price target of $2.00, suggesting a potential downside of 45.65%. PetIQ has a consensus price target of $28.40, suggesting a potential upside of 6.57%. Given PetIQ’s stronger consensus rating and higher probable upside, analysts plainly believe PetIQ is more favorable than Aceto.

Dividends

Aceto pays an annual dividend of $0.04 per share and has a dividend yield of 1.1%. PetIQ does not pay a dividend. Aceto pays out 3.4% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Aceto and PetIQ’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Aceto	$638.32 million	0.18	$11.37 million	$1.19	3.09
PetIQ	$266.69 million	2.45	-$3.49 million	$0.39	68.33

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

Profitability

This table compares Aceto and PetIQ’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Aceto	-28.23%	7.93%	2.88%
PetIQ	0.17%	11.39%	6.69%

Institutional & Insider Ownership

70.7% of Aceto shares are owned by institutional investors. Comparatively, 64.0% of PetIQ shares are owned by institutional investors. 4.1% of Aceto shares are owned by insiders. Comparatively, 45.3% of PetIQ shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Summary

PetIQ beats Aceto on 10 of the 15 factors compared between the two stocks.

About Aceto

Aceto Corporation, together with its subsidiaries, sources, markets, sells, and distributes finished dosage form generics, nutraceutical products, pharmaceutical intermediates and active ingredients, agricultural protection products, and specialty chemicals. The company operates in three segments: Human Health, Pharmaceutical Ingredients, and Performance Chemicals. The Human Health segment supplies raw materials used in the production of nutritional and packaged dietary supplements, including vitamins, amino acids, iron compounds, and bio chemicals used in pharmaceutical and nutritional preparations. This segment is also involved in developing and marketing generic pharmaceutical products. It sells its generic prescription and over the counter pharmaceutical products to wholesalers, chain drug stores, distributors, and mass market merchandisers. The Pharmaceutical Ingredients segment offers active pharmaceutical ingredients and pharmaceutical intermediates to various generic drug companies. The Performance Chemicals segment provides specialty chemicals for use in the manufacture of plastics, surface coatings, cosmetics and personal care products, textiles, and fuels and lubricants, as well as for food, flavor, paper, and film industries; dye and pigment intermediates used in the color-producing industries; and organic intermediates used in the production of agrochemicals. Its raw materials are also used in electronic parts for photo tooling, circuit boards, and production of computer chips. This segment also offers agricultural protection products comprising herbicides, fungicides, and insecticides, which control weed growth and the spread of insects and microorganisms; and sprout inhibitors for potatoes. The company serves various companies in the industrial chemical, agricultural, and human health and pharmaceutical industries primarily in the United States, Europe, and Asia. Aceto Corporation was founded in 1947 and is headquartered in Port Washington, New York.

About PetIQ

PetIQ, Inc. develops, manufactures, and distributes pet medications, and health and wellness products for dogs and cats in the United States, Canada, and Europe. It offers pet prescription medications, including products for arthritis, thyroid, and diabetes and pain treatments, as well as heartworm preventatives, antibiotics, and other specialty medications; over-the-counter medications and supplies, such as flea and tick control products in various forms comprising spot on treatments, chewables, and collars; and health and wellness products consisting of specialty treats and other pet products, which include dental treats and nutritional supplements. The company provides its products primarily under the VetIQ, PetAction Plus, Advecta, PetLock Plus, and TruProfen brands. It sells its products through distributors as well as through retail stores, including approximately 40,000 retail pharmacy locations. PetIQ, Inc. was founded in 2010 and is headquartered in Eagle, Idaho.