![]() Sartorius margin comparison (koyfin) Growth LPS is dragging profitability down for Sartorius AG in comparison. The BPS division has EBITDA margins of 36%, while the LPS division only has a 26% EBITDA margin. Yet Stedim consistently reports higher Net income margins, due to the more attractive nature of their business segment. Keep in mind that Sartorius is still heavily reinvesting into its business, so net income isn't stable at all. Gross profit and EBITDA margins are pretty comparable, but on the Net income margin, we see a bigger divide. Both stocks managed to significantly increase their margins over the last decade, but Stedim did an even better job. ![]() If we compare margins for both stocks we can see a similar picture to capital reinvestment: Sartorius Stedim is consistently outperforming Sartorius AG. ![]() Sartorius capital reinvestment comparison (koyfin) ProfitabilityĪt the end of the day, what matters for a company in the long term is profitability. Both stocks have great returns and earn returns on capital over their weighted average cost of capital, but Sartorius Stedim manages to generate a significantly better return. We can see that Sartorius Stedim consistently outperforms Sartorius AG in return on assets and return on capital, while Return on equity is roughly equal. Sartorius does value accretive acquisitions in both divisions, but let's take a look at the return on assets/capital/equity of both stocks. Over the long term, great capital allocation is an important driver of performance. Sartorius Stedim revenue comes to 100% from the BPS division, while Sartorius AGs revenue is split 80/20 between BPS/LPS. In the following segment, I will discuss why I believe the BPS division to be the more attractive business and thus consider Sartorius Stedim the better stock to own (I own shares myself). Bioproduct solutions over lab equipment & services Sartorius products and services are needed in every step of modern drug development and they have a deep and widening moat. The company has a high amount of recurring revenues in BPS through Single-Use products (Single-use products save cost, time and energy usage and are a growing segment) and they have a great market position in relevant end-markets like filtration, fluid management and fermentation.
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