Analyzing Atrion (ATRI) & Nevro (NVRO)

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

Analyst Ratings

This is a summary of recent recommendations for Atrion and Nevro, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Atrion 0 0 0 0 N/A
Nevro 0 1 6 0 2.86

Nevro has a consensus target price of $99.71, suggesting a potential upside of 25.03%. Given Nevro’s higher probable upside, analysts clearly believe Nevro is more favorable than Atrion.

Institutional and Insider Ownership

59.0% of Atrion shares are held by institutional investors. 23.1% of Atrion shares are held by company insiders. Comparatively, 9.1% of Nevro shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Atrion and Nevro’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Atrion $143.49 million 7.54 $27.58 million $18.05 32.41
Nevro $228.50 million 10.34 -$31.77 million ($1.45) -55.00

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

Dividends

Atrion pays an annual dividend of $4.80 per share and has a dividend yield of 0.8%. Nevro does not pay a dividend. Atrion pays out 26.6% of its earnings in the form of a dividend. Nevro has raised its dividend for 15 consecutive years.

Risk & Volatility

Atrion has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500. Comparatively, Nevro has a beta of -0.83, meaning that its share price is 183% less volatile than the S&P 500.

Profitability

This table compares Atrion and Nevro’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Atrion 22.98% 18.34% 16.33%
Nevro -14.09% -17.27% -9.88%

Summary

Atrion beats Nevro on 10 of the 16 factors compared between the two stocks.

Atrion Company Profile

Atrion Corporation (Atrion) is engaged in developing and manufacturing products, primarily for medical applications. The Company’s medical products range from fluid delivery devices to ophthalmic and cardiovascular products. Its fluid delivery products include valves that promote infection control and needle safety. It has developed a range of valves designed to fill, hold and release controlled amounts of fluids or gasses on demand for use in various intubation, intravenous, catheter and other applications in areas, such as anesthesia and oncology. Its cardiovascular product, MPS2 Myocardial Protection System (MPS2), is the system used in open-heart surgery that delivers fluids and medications, mixes critical drugs and controls temperature, pressure and other variables. The Company manufactures specialized medical devices that disinfect contact lenses. Its other medical and non-medical product lines consist of instrumentation and associated disposables.

Nevro 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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