CONMED Corporation (NASDAQ: CNMD) and Varian Medical Systems (NYSE:VAR) are both medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their risk, valuation, dividends, profitabiliy, institutional ownership, earnings and analyst recommendations.

Profitability

This table compares CONMED Corporation and Varian Medical Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CONMED Corporation 1.61% 8.69% 3.79%
Varian Medical Systems 9.39% 24.82% 11.15%

Dividends

CONMED Corporation pays an annual dividend of $0.80 per share and has a dividend yield of 1.6%. Varian Medical Systems does not pay a dividend. CONMED Corporation pays out 181.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider & Institutional Ownership

100.0% of CONMED Corporation shares are held by institutional investors. Comparatively, 99.7% of Varian Medical Systems shares are held by institutional investors. 2.6% of CONMED Corporation shares are held by company insiders. Comparatively, 0.9% of Varian Medical Systems shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

CONMED Corporation has a beta of 0.67, meaning that its share price is 33% less volatile than the S&P 500. Comparatively, Varian Medical Systems has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for CONMED Corporation and Varian Medical Systems, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CONMED Corporation 0 2 1 0 2.33
Varian Medical Systems 3 5 4 0 2.08

CONMED Corporation currently has a consensus price target of $48.33, suggesting a potential downside of 5.08%. Varian Medical Systems has a consensus price target of $92.14, suggesting a potential downside of 11.48%. Given CONMED Corporation’s stronger consensus rating and higher possible upside, equities research analysts clearly believe CONMED Corporation is more favorable than Varian Medical Systems.

Valuation & Earnings

This table compares CONMED Corporation and Varian Medical Systems’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CONMED Corporation $768.89 million 1.85 $124.94 million $0.44 115.73
Varian Medical Systems $3.25 billion 2.94 $625.10 million $3.10 33.58

Varian Medical Systems has higher revenue and earnings than CONMED Corporation. Varian Medical Systems is trading at a lower price-to-earnings ratio than CONMED Corporation, indicating that it is currently the more affordable of the two stocks.

Summary

Varian Medical Systems beats CONMED Corporation on 10 of the 16 factors compared between the two stocks.

CONMED Corporation Company Profile

CONMED Corporation is a medical technology company. The Company is engaged in the development, manufacturing and sale on a global basis of surgical devices and related equipment. The Company provides surgical devices and equipment for minimally invasive procedures. The Company’s products are used by surgeons and physicians in a range of specialties, including orthopedics, general surgery, gynecology, neurosurgery and gastroenterology. The Company’s product lines consist of orthopedic surgery, general surgery and surgical visualization. As of December 31, 2016, the Company’s products are distributed domestically directly to over 6,000 hospitals, surgery centers and other healthcare institutions, as well as through medical specialty distributors. The Company’s orthopedic surgery product lines include sports medicine, powered surgical instruments, and sports biologics and tissue. These products are marketed under a range of brands, including Hall, CONMED Linvatec, Concept and Shutt.

Varian Medical Systems Company Profile

Varian Medical Systems, Inc. is a manufacturer of medical devices and software for treating cancer and other medical conditions with radiotherapy, radiosurgery, proton therapy and brachytherapy medical devices and software for treating cancer and other medical conditions with radiotherapy, radiosurgery, proton therapy and brachytherapy. The Company also has Varian Particle Therapy (VPT) and the operations of the Ginzton Technology Center (GTC). Its VPT business develops, designs, manufactures, sells and services products and systems for delivering proton therapy, another form of external beam radiotherapy using proton beams for the treatment of cancer. Its ProBeam system is capable of delivering intensity modulated proton therapy (IMPT) using pencil beam scanning technology. Its ProBeam Compact is a single room proton therapy product.

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