Analyzing Abbott Laboratories (NYSE:ABT) & ResMed (NYSE:RMD)

ResMed (NYSE:RMD – Get Free Report) and Abbott Laboratories (NYSE:ABT – Get Free Report) are both large-cap healthcare companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, analyst recommendations, profitability and earnings.

Profitability

This table compares ResMed and Abbott Laboratories’ net margins, return on equity and return on assets.

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Volatility & Risk

ResMed has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500. Comparatively, Abbott Laboratories has a beta of 0.59, meaning that its share price is 41% less volatile than the S&P 500.

Dividends

ResMed pays an annual dividend of $2.64 per share and has a dividend yield of 1.2%. Abbott Laboratories pays an annual dividend of $2.52 per share and has a dividend yield of 2.6%. ResMed pays out 25.3% of its earnings in the form of a dividend. Abbott Laboratories pays out 81.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. ResMed has raised its dividend for 13 consecutive years and Abbott Laboratories has raised its dividend for 54 consecutive years. Abbott Laboratories is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

55.0% of ResMed shares are owned by institutional investors. Comparatively, 75.2% of Abbott Laboratories shares are owned by institutional investors. 0.6% of ResMed shares are owned by company insiders. Comparatively, 0.5% of Abbott Laboratories shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares ResMed and Abbott Laboratories”s gross revenue, earnings per share and valuation.

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

Analyst Ratings

This is a summary of current recommendations for ResMed and Abbott Laboratories, as provided by MarketBeat.com.

ResMed presently has a consensus target price of $241.69, suggesting a potential upside of 7.01%. Abbott Laboratories has a consensus target price of $118.88, suggesting a potential upside of 20.45%. Given Abbott Laboratories’ stronger consensus rating and higher probable upside, analysts clearly believe Abbott Laboratories is more favorable than ResMed.

Summary

Abbott Laboratories beats ResMed on 10 of the 18 factors compared between the two stocks.

About ResMed

(Get Free Report)

ResMed Inc. develops, manufactures, distributes, and markets medical devices and cloud-based software applications for the healthcare markets. The company operates in two segments, Sleep and Respiratory Care, and Software as a Service. It offers various products and solutions for a range of respiratory disorders, including ApneaLink Air, a portable diagnostic device that measures oximetry, respiratory effort, pulse, nasal flow, and snoring; and NightOwl, a portable, cloud-connected, and disposable diagnostic device that measures AHI based on derived peripheral arterial tone, actigraphy, and oximetry over several nights. The company also provides AirView, a cloud-based system that enables remote monitoring and changing of patients’ device settings; myAir, a personalized therapy management application for patients with sleep apnea that provides support, education, and troubleshooting tools for increased patient engagement and improved compliance; U-Sleep, a compliance monitoring solution that enables home medical equipment (HME) to streamline their sleep programs; connectivity module and propeller solutions; and Propeller portal. It offers out-of-hospital software solution, such as Brightree business management software and service solutions to providers of HME, pharmacy, home infusion, orthotics, and prosthetics services; MatrixCare care management and related ancillary solutions to senior living, skilled nursing, life plan communities, home health, home care, and hospice organizations, as well as related accountable care organizations; HEALTHCAREfirst that offers electronic health record, software, billing and coding services, and analytics for home health and hospice agencies; and MEDIFOX DAN’s software solutions. The company markets its products to sleep clinics, home healthcare dealers, and hospitals through a network of distributors and direct sales force. ResMed Inc. was founded in 1989 and is headquartered in San Diego, California.

About Abbott Laboratories

(Get Free Report)

Abbott Laboratories, together with its subsidiaries, discovers, develops, manufactures, and sells health care products worldwide. It operates in four segments: Established Pharmaceutical Products, Diagnostic Products, Nutritional Products, and Medical Devices. The company provides generic pharmaceuticals for the treatment of pancreatic exocrine insufficiency, irritable bowel syndrome or biliary spasm, intrahepatic cholestasis or depressive symptoms, gynecological disorder, hormone replacement therapy, dyslipidemia, hypertension, hypothyroidism, Ménière’s disease and vestibular vertigo, pain, fever, inflammation, and migraine, as well as provides anti-infective clarithromycin, influenza vaccine, and products to regulate physiological rhythm of the colon. It also offers laboratory and transfusion medicine systems in the areas of immunoassay, clinical chemistry, hematology, and transfusion; molecular diagnostics polymerase chain reaction instrument systems that automate the extraction, purification, and preparation of DNA and RNA from patient samples, and detect and measure infectious agents; point of care systems; cartridges for testing blood gas, chemistry, electrolytes, coagulation, and immunoassay; rapid diagnostics lateral flow testing products; molecular point-of-care testing for HIV, SARS-CoV-2, influenza A and B, RSV, and strep A; cardiometabolic test systems; drug and alcohol test, and remote patient monitoring and consumer self-test systems; and informatics and automation solutions for laboratories. In addition, the company provides pediatric and adult nutritional products; rhythm management, electrophysiology, heart failure, vascular, and structural heart devices for the treatment of cardiovascular diseases; diabetes care products, such as glucose and blood glucose monitoring systems; and neuromodulation devices for the management of chronic pain and movement disorders. Abbott Laboratories was founded in 1888 and is based in North Chicago, Illinois.

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