Integer (NYSE: ITGR) and Arch Therapeutics (OTCMKTS:ARTH) are both small-cap medical companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, valuation, institutional ownership, earnings and analyst recommendations.

Volatility & Risk

Integer has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500. Comparatively, Arch Therapeutics has a beta of 1.13, suggesting that its share price is 13% more volatile than the S&P 500.

Institutional and Insider Ownership

95.1% of Integer shares are owned by institutional investors. Comparatively, 0.0% of Arch Therapeutics shares are owned by institutional investors. 4.8% of Integer shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Integer and Arch Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Integer 1.42% 11.22% 3.03%
Arch Therapeutics N/A -246.16% -130.60%

Earnings & Valuation

This table compares Integer and Arch Therapeutics’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Integer $1.39 billion 1.05 $5.96 million $0.63 72.78
Arch Therapeutics N/A N/A -$7.78 million ($0.04) -19.00

Integer has higher revenue and earnings than Arch Therapeutics. Arch Therapeutics is trading at a lower price-to-earnings ratio than Integer, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Integer and Arch Therapeutics, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Integer 0 3 1 0 2.25
Arch Therapeutics 0 0 4 0 3.00

Integer presently has a consensus price target of $51.00, indicating a potential upside of 11.23%. Arch Therapeutics has a consensus price target of $2.83, indicating a potential upside of 272.81%. Given Arch Therapeutics’ stronger consensus rating and higher probable upside, analysts plainly believe Arch Therapeutics is more favorable than Integer.

Summary

Integer beats Arch Therapeutics on 8 of the 12 factors compared between the two stocks.

About Integer

Greatbatch, Inc. is a developer and manufacturer of medical devices and components. The Company operates through two segments: Greatbatch Medical and QiG Group (QiG). Greatbatch Medical designs and manufactures products where the Company either owns the intellectual property or has unique manufacturing and assembly expertise. Greatbatch Medical’s products include medical devices and components for the cardiac, neuromodulation, orthopedics, portable medical, vascular and energy markets. QiG focuses on developing medical device systems for some of healthcare’s challenges and reflects the Company’s strategic evolution of its product offerings in order to raise the growth and profitability profile of the Company. QiG utilizes a diversified portfolio approach with three investment modes: new medical device systems commercialization, collaborative programs with OEM customers and strategic equity positions in emerging healthcare companies.

About Arch Therapeutics

Arch Therapeutics, Inc. is a development-stage company. The Company operates as a biotechnology company. The Company focuses on developing products to stop bleeding (hemostasis) and control leaking (sealant) during surgery and trauma care. The Company’s technology is based on a self-assembling peptide that creates a physical, mechanical barrier, which could be applied to seal organs or wounds that are leaking blood and other fluids. The Company’s primary product candidates, collectively known as the AC5 Devices (AC5), are designed to achieve hemostasis in surgical procedures. The Company’s product candidates rely on its self-assembling peptide technology and are designed to achieve hemostasis in skin wounds, and minimally invasive and open surgical procedures. The Company focuses on developing other product candidates based on its technology platform for use in a range of indications. As of September 30, 2016, the Company had not generated any revenues.

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