ABIOMED (NASDAQ:ABMD) and Stryker (NYSE:SYK) are both large-cap medical companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, analyst recommendations, dividends, institutional ownership, earnings, valuation and profitability.
This table compares ABIOMED and Stryker’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility & Risk
ABIOMED has a beta of 0.03, indicating that its share price is 97% less volatile than the S&P 500. Comparatively, Stryker has a beta of 0.59, indicating that its share price is 41% less volatile than the S&P 500.
Stryker pays an annual dividend of $1.88 per share and has a dividend yield of 1.1%. ABIOMED does not pay a dividend. Stryker pays out 29.0% of its earnings in the form of a dividend. Stryker has increased its dividend for 7 consecutive years.
Earnings and Valuation
This table compares ABIOMED and Stryker’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|ABIOMED||$593.75 million||29.08||$112.17 million||$2.45||157.05|
|Stryker||$12.44 billion||5.14||$1.02 billion||$6.49||26.35|
Stryker has higher revenue and earnings than ABIOMED. Stryker is trading at a lower price-to-earnings ratio than ABIOMED, indicating that it is currently the more affordable of the two stocks.
Institutional & Insider Ownership
86.2% of ABIOMED shares are held by institutional investors. Comparatively, 75.1% of Stryker shares are held by institutional investors. 3.5% of ABIOMED shares are held by company insiders. Comparatively, 7.3% of Stryker shares are held by company 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.
This is a breakdown of current recommendations for ABIOMED and Stryker, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
ABIOMED presently has a consensus price target of $374.00, suggesting a potential downside of 2.80%. Stryker has a consensus price target of $177.95, suggesting a potential upside of 4.04%. Given Stryker’s higher probable upside, analysts plainly believe Stryker is more favorable than ABIOMED.
Stryker beats ABIOMED on 10 of the 17 factors compared between the two stocks.
ABIOMED, Inc. engages in the research, development, and sale of medical devices to assist or replace the pumping function of the failing heart. It also provides continuum of care to heart failure patients. The company offers Impella 2.5 catheter, a percutaneous micro heart pump with integrated motor and sensors for use in interventional cardiology; and Impella CP, a device used by interventional cardiologists to support patients in the cath lab and cardiac surgeons in the heart surgery suite. It also provides Impella 5.0 and Impella LD, which are percutaneous micro heart pumps with integrated motors and sensors for use primarily in the heart surgery suite; and Impella RP, a percutaneous catheter-based axial flow pump. In addition, the company is involved in the development of Impella 5.5 and Impella BTR that are percutaneous micro heart pumps with integrated motors and sensors; and Impella ECP pump, a device for blood flow of greater than three liters per minute. It sells its products through direct sales and clinical support personnel in the United States, Canada, Europe, and Japan. The company was founded in 1981 and is headquartered in Danvers, Massachusetts.
Stryker Corporation operates as a medical technology company. The company operates through three segments: Orthopaedics, MedSurg, and Neurotechnology and Spine. The Orthopaedics segment provides implants for use in hip and knee joint replacements, and trauma and extremities surgeries. The MedSurg segment offers surgical equipment and surgical navigation systems, endoscopic and communications systems, patient handling, emergency medical equipment and intensive care disposable products, reprocessed and remanufactured medical devices, and other medical devices for use in various medical specialties. The Neurotechnology and Spine segment provides neurotechnology products that include products used for minimally invasive endovascular techniques; products for brain and open skull based surgical procedures; orthobiologic and biosurgery products, such as synthetic bone grafts and vertebral augmentation products; and minimally invasive products for the treatment of acute ischemic and hemorrhagic stroke. It also provides spinal implant products comprising cervical, thoracolumbar, and interbody systems for use in spinal injury, deformity, and degenerative therapies. The company sells its products to doctors, hospitals, and other healthcare facilities through company-owned sales subsidiaries and branches, as well as third-party dealers and distributors in approximately 85 countries. Stryker Corporation was founded in 1941 and is headquartered in Kalamazoo, Michigan.
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