Stryker Corporation (NYSE: SYK) and St Jude Medical (NYSE:STJ) are both medical companies, but which is the superior business? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, dividends, profitability, valuation and risk.

Dividends

Stryker Corporation pays an annual dividend of $1.70 per share and has a dividend yield of 1.2%. St Jude Medical pays an annual dividend of $1.24 per share and has a dividend yield of 1.5%. Stryker Corporation pays out 37.9% of its earnings in the form of a dividend. St Jude Medical pays out 54.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Stryker Corporation has raised its dividend for 6 consecutive years and St Jude Medical has raised its dividend for 6 consecutive years.

Volatility and Risk

Stryker Corporation has a beta of 0.8, indicating that its stock price is 20% less volatile than the S&P 500. Comparatively, St Jude Medical has a beta of 1.23, indicating that its stock price is 23% more volatile than the S&P 500.

Insider & Institutional Ownership

73.8% of Stryker Corporation shares are held by institutional investors. Comparatively, 82.7% of St Jude Medical shares are held by institutional investors. 7.4% of Stryker Corporation shares are held by insiders. Comparatively, 4.8% of St Jude Medical shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

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

Net Margins Return on Equity Return on Assets
Stryker Corporation 14.22% 24.26% 11.36%
St Jude Medical 14.14% 19.40% 6.75%

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Stryker Corporation and St Jude Medical, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stryker Corporation 3 6 10 0 2.37
St Jude Medical 0 4 1 0 2.20

Stryker Corporation currently has a consensus price target of $143.38, suggesting a potential downside of 1.79%. St Jude Medical has a consensus price target of $77.25, suggesting a potential downside of 4.42%. Given Stryker Corporation’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Stryker Corporation is more favorable than St Jude Medical.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Stryker Corporation $11.96 billion 4.57 $3.29 billion $4.48 32.59
St Jude Medical N/A N/A N/A $2.28 35.45

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

Summary

Stryker Corporation beats St Jude Medical on 10 of the 13 factors compared between the two stocks.

Stryker Corporation Company Profile

Stryker Corporation is a medical technology company. The Company offers a range of medical technologies, including orthopedic, medical and surgical, and neurotechnology and spine products. The Company’s segments include Orthopaedics; MedSurg; Neurotechnology and Spine, and Corporate and Other. The Orthopaedics segment includes reconstructive (hip and knee) and trauma implant systems and other related products. The MedSurg segment includes surgical equipment and surgical navigation systems; endoscopic and communications systems; patient handling, emergency medical equipment, intensive care disposable products; reprocessed and remanufactured medical devices, and other related products. The Neurotechnology and Spine segment includes neurovascular products, spinal implant systems and other related products. The Company’s products include implants, which are used in joint replacement and trauma surgeries, and other products that are used in a range of medical specialties.

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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