St Jude Medical (NYSE: STJ) and RTI Surgical (NASDAQ:RTIX) are both healthcare companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, institutional ownership, valuation, profitability, analyst recommendations, earnings and dividends.

Profitability

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

Net Margins Return on Equity Return on Assets
St Jude Medical 14.14% 19.40% 6.75%
RTI Surgical -6.53% 2.07% 0.94%

Insider & Institutional Ownership

82.7% of St Jude Medical shares are held by institutional investors. Comparatively, 70.0% of RTI Surgical shares are held by institutional investors. 4.8% of St Jude Medical shares are held by insiders. Comparatively, 4.9% of RTI Surgical shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Valuation & Earnings

This table compares St Jude Medical and RTI Surgical’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
St Jude Medical N/A N/A N/A $2.28 35.45
RTI Surgical $279.95 million 0.96 $15.45 million ($0.38) -11.97

RTI Surgical has higher revenue and earnings than St Jude Medical. RTI Surgical 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.

Volatility & Risk

St Jude Medical has a beta of 1.23, suggesting that its stock price is 23% more volatile than the S&P 500. Comparatively, RTI Surgical has a beta of 1.73, suggesting that its stock price is 73% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for St Jude Medical and RTI Surgical, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
St Jude Medical 0 4 1 0 2.20
RTI Surgical 0 0 0 0 N/A

St Jude Medical currently has a consensus target price of $77.25, indicating a potential downside of 4.42%. Given St Jude Medical’s higher probable upside, equities research analysts plainly believe St Jude Medical is more favorable than RTI Surgical.

Dividends

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

Summary

St Jude Medical beats RTI Surgical on 8 of the 13 factors compared between the two stocks.

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.

RTI Surgical Company Profile

RTI Surgical, Inc. is engaged in producing orthopedic and other surgical implants that repair and promote the natural healing of human bone and other human tissues. The Company uses natural tissues, metals and synthetics process to produce its products. The Company’s business primarily consists of six categories, such as spine, sports medicine, ortho fixation, bone graft substitutes and general orthopedic (BGS and general orthopedic), dental and surgical specialties. It processes donated human musculoskeletal and other tissue, including bone, cartilage, tendon, ligament, fascia lata, pericardium, sclera and dermal tissue, and bovine and porcine animal tissue in producing allograft and xenograft implants utilizing BIOCLEANSE, TUTOPLAST and CANCELLE SP sterilization processes, and manufactures metal and synthetic implants for distribution to hospitals and surgeons. The Company distributes its implants and services in approximately 50 states and in over 45 countries across the world.

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