Edwards Lifesciences Corporation (NYSE: EW) and Waters Corporation (NYSE:WAT) are both large-cap medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, earnings, dividends, profitability and risk.

Earnings & Valuation

This table compares Edwards Lifesciences Corporation and Waters Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Edwards Lifesciences Corporation $3.23 billion 7.39 $1.05 billion $3.30 34.27
Waters Corporation $2.21 billion 6.80 $766.04 million $6.62 28.42

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

Risk & Volatility

Edwards Lifesciences Corporation has a beta of 0.62, suggesting that its share price is 38% less volatile than the S&P 500. Comparatively, Waters Corporation has a beta of 0.81, suggesting that its share price is 19% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Edwards Lifesciences Corporation and Waters Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Edwards Lifesciences Corporation 0 5 14 1 2.80
Waters Corporation 2 7 5 0 2.21

Edwards Lifesciences Corporation presently has a consensus target price of $120.05, suggesting a potential upside of 6.17%. Waters Corporation has a consensus target price of $185.55, suggesting a potential downside of 1.38%. Given Edwards Lifesciences Corporation’s stronger consensus rating and higher possible upside, equities analysts plainly believe Edwards Lifesciences Corporation is more favorable than Waters Corporation.

Profitability

This table compares Edwards Lifesciences Corporation and Waters Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Edwards Lifesciences Corporation 22.16% 27.17% 15.91%
Waters Corporation 24.26% 23.91% 11.89%

Institutional & Insider Ownership

81.9% of Edwards Lifesciences Corporation shares are held by institutional investors. Comparatively, 91.0% of Waters Corporation shares are held by institutional investors. 2.1% of Edwards Lifesciences Corporation shares are held by insiders. Comparatively, 5.1% of Waters Corporation shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

Edwards Lifesciences Corporation beats Waters Corporation on 10 of the 15 factors compared between the two stocks.

About Edwards Lifesciences Corporation

Edwards Lifesciences Corporation is a manufacturer of heart valve systems and repair products used to replace or repair a patient’s diseased or defective heart valve. The Company is engaged in patient-focused innovations for structural heart disease and critical care monitoring. Its segments include United States, Europe, Japan and Rest of World. Its products are categorized into three areas: Transcatheter Heart Valve Therapy, Surgical Heart Valve Therapy and Critical Care. It also develops hemodynamic monitoring systems that are used to measure a patient’s cardiovascular function in the hospital setting. It is developing products, such as the Edwards SAPIEN 3 Ultra System and Edwards SAPIEN XT transcatheter heart valve, among others. Its Transcatheter Heart Valve Therapy and Surgical Heart Valve Therapy products are manufactured in the United States, Singapore and Switzerland. Critical Care products are manufactured in its facilities located in Puerto Rico and the Dominican Republic.

About Waters Corporation

Waters Corporation is an analytical instrument manufacturer. The Company operates through two segments: Waters and TA. It designs, manufactures, sells and services high performance liquid chromatography (HPLC), ultra performance liquid chromatography (UPLC and together with HPLC, referred to as LC) and mass spectrometry (MS) technology systems and support products, including chromatography columns, other consumable products and post-warranty service plans. It also designs, manufactures, sells and services thermal analysis, rheometry and calorimetry instruments through its TA product line. It is also a developer and supplier of software-based products that interface with the Company’s instruments, as well as other suppliers’ instruments. Its LC and LC-MS instruments are utilized in a range of industries to detect, identify, monitor and measure the chemical, physical and biological composition of materials, and to purify a range of compounds.

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