Cyberonics (NASDAQ: CYBX) and St Jude Medical (NYSE:STJ) are both healthcare companies, but which is the superior stock? We will compare the two businesses based on the strength of their risk, institutional ownership, earnings, dividends, analyst recommendations, valuation and profitabiliy.

Dividends

St Jude Medical pays an annual dividend of $1.24 per share and has a dividend yield of 1.5%. Cyberonics does not pay a dividend. St Jude Medical pays out 54.4% of its earnings in the form of a dividend. Cyberonics has raised its dividend for 6 consecutive years.

Insider & Institutional Ownership

82.7% of St Jude Medical shares are owned by institutional investors. 4.8% of St Jude Medical shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Cyberonics and St Jude Medical’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cyberonics N/A N/A N/A N/A N/A
St Jude Medical N/A N/A N/A $2.28 35.45

Analyst Ratings

This is a summary of current ratings and price targets for Cyberonics and St Jude Medical, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cyberonics 0 0 0 0 N/A
St Jude Medical 0 8 1 0 2.11

St Jude Medical has a consensus price target of $80.43, indicating a potential downside of 0.48%. Given St Jude Medical’s higher probable upside, analysts plainly believe St Jude Medical is more favorable than Cyberonics.

Profitability

This table compares Cyberonics and St Jude Medical’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cyberonics 15.33% 17.49% 15.23%
St Jude Medical 14.14% 19.40% 6.75%

Summary

St Jude Medical beats Cyberonics on 6 of the 10 factors compared between the two stocks.

Cyberonics Company Profile

Cyberonics, Inc. is a medical device company. The Company is engaged in the design, development, sale and marketing of medical devices for epilepsy, depression and heart failure. Its seminal product, the VNS Therapy System, is an implantable device that provides neuromodulation therapy for the treatment of drug-resistant epilepsy and treatment-resistant depression (TRD). The Company’s VITARIA System is an implantable device that provides a form of neuromodulation therapy for the treatment of chronic heart failure (CHF). The VNS Therapy System and its VITARIA System include an implantable pulse generator to stimulate the vagus nerve; a lead that conducts current pulses from the pulse generator to the vagus nerve; a surgical instrument to assist with the implant procedure; equipment to enable the treating physician to set the pulse generator stimulation parameters for the patient; instruction manuals, and in the VNS Therapy System, magnets to suspend or induce stimulation manually.

St Jude Medical Company Profile

St. Jude Medical, Inc. is focused on the development, manufacture and distribution of cardiovascular medical devices for the global cardiac rhythm management, cardiovascular and atrial fibrillation therapy areas, and interventional pain therapy and neurostimulation devices for the management of chronic pain and movement disorders. The Company’s product categories include tachycardia implantable cardioverter defibrillator systems; atrial fibrillation products (electrophysiology introducers and catheters, advanced cardiac mapping, navigation and recording systems and ablation systems); bradycardia pacemaker systems; vascular products (vascular closure products, pressure measurement guidewires, optical coherence tomography imaging products, vascular plugs, heart failure monitoring devices and other vascular accessories); structural heart products (heart valve replacement and repair products and structural heart defect devices); neuromodulation products, and Thoratec products.

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