Meridian Bioscience (NASDAQ: VIVO) and Nevro Corp. (NYSE:NVRO) are both medical companies, but which is the superior business? We will compare the two companies based on the strength of their analyst recommendations, profitability, institutional ownership, valuation, dividends, risk and earnings.

Profitability

This table compares Meridian Bioscience and Nevro Corp.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Meridian Bioscience 10.77% 16.93% 11.36%
Nevro Corp. -14.33% -16.25% -9.43%

Risk & Volatility

Meridian Bioscience has a beta of 0.84, indicating that its share price is 16% less volatile than the S&P 500. Comparatively, Nevro Corp. has a beta of -0.66, indicating that its share price is 166% less volatile than the S&P 500.

Institutional and Insider Ownership

87.3% of Meridian Bioscience shares are held by institutional investors. 2.3% of Meridian Bioscience shares are held by insiders. Comparatively, 12.1% of Nevro Corp. shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and price targets for Meridian Bioscience and Nevro Corp., as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Meridian Bioscience 1 3 0 0 1.75
Nevro Corp. 0 1 6 0 2.86

Meridian Bioscience currently has a consensus price target of $14.33, indicating a potential upside of 0.58%. Nevro Corp. has a consensus price target of $102.00, indicating a potential upside of 12.81%. Given Nevro Corp.’s stronger consensus rating and higher probable upside, analysts clearly believe Nevro Corp. is more favorable than Meridian Bioscience.

Valuation & Earnings

This table compares Meridian Bioscience and Nevro Corp.’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Meridian Bioscience $198.07 million 3.04 $52.80 million $0.51 27.94
Nevro Corp. $277.91 million 9.58 -$22.57 million ($1.38) -65.52

Meridian Bioscience has higher revenue, but lower earnings than Nevro Corp.. Nevro Corp. is trading at a lower price-to-earnings ratio than Meridian Bioscience, indicating that it is currently the more affordable of the two stocks.

Dividends

Meridian Bioscience pays an annual dividend of $0.50 per share and has a dividend yield of 3.5%. Nevro Corp. does not pay a dividend. Meridian Bioscience pays out 98.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Summary

Meridian Bioscience beats Nevro Corp. on 8 of the 15 factors compared between the two stocks.

Meridian Bioscience Company Profile

Meridian Bioscience, Inc. is a life science company engaged in the development, manufacture, sale and distribution of diagnostic test kits for gastrointestinal, viral, respiratory and parasitic infectious diseases, and elevated blood lead levels, and the manufacture and distribution of bulk antigens, antibodies, polymerase chain reaction (PCR)/quantitative PCR (qPCR) reagents, nucleotides, competent cells and bioresearch reagents used by researchers and other diagnostic manufacturers. Its segments include Diagnostics and Life Science. The Diagnostics segment includes manufacturing operations in Cincinnati, and the sale and distribution of diagnostic test kits in the countries consisting of North, Central and South America; Europe, the Middle East and Africa (EMEA), and other countries outside of the Americas and EMEA. The Life Science segment consists of manufacturing operations in Memphis, Tennessee; Boca Raton, Florida; London, England; Luckenwalde, Germany, and Sydney, Australia.

Nevro Corp. Company Profile

Nevro Corp. is a global medical device company. The Company focuses on providing products that improve the quality of life of patients suffering from chronic pain. The Company has developed and commercialized the Senza spinal cord stimulation (SCS) system, an evidence-based neuromodulation platform for the treatment of chronic pain. Its HF10 therapy is designed to deliver neuromodulation solutions for treating chronic pain. HF10 therapy enables patients to achieve sustained pain relief without paresthesia, thus enabling its patients to avoid the uncomfortable shocking or jolting sensations commonly associated with paresthesia. HF10 therapy relies on consistent anatomical lead placement. As of December 31, 2016, it was investigating the use of HF10 therapy to address additional indications, such as chronic upper limb and neck pain, painful neuropathies and non-surgical refractory back pain. The Senza system is approved to create electrical impulses from 2 hertz (Hz) to 10,000 Hz.

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