Head to Head Analysis: Digirad (DRAD) and BIOLASE (BIOL)

Digirad (NASDAQ: DRAD) and BIOLASE (NASDAQ:BIOL) are both small-cap medical companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, profitability, earnings, dividends, analyst recommendations and institutional ownership.

Dividends

Digirad pays an annual dividend of $0.22 per share and has a dividend yield of 8.9%. BIOLASE does not pay a dividend. Digirad pays out -37.9% of its earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current recommendations for Digirad and BIOLASE, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Digirad 0 0 1 0 3.00
BIOLASE 0 0 1 0 3.00

Digirad presently has a consensus target price of $6.00, indicating a potential upside of 142.91%. BIOLASE has a consensus target price of $2.50, indicating a potential upside of 525.00%. Given BIOLASE’s higher probable upside, analysts clearly believe BIOLASE is more favorable than Digirad.

Risk & Volatility

Digirad has a beta of 1.89, indicating that its stock price is 89% more volatile than the S&P 500. Comparatively, BIOLASE has a beta of 2.31, indicating that its stock price is 131% more volatile than the S&P 500.

Profitability

This table compares Digirad and BIOLASE’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Digirad -9.93% 9.82% 6.02%
BIOLASE -36.28% -74.51% -40.81%

Insider & Institutional Ownership

53.1% of Digirad shares are held by institutional investors. Comparatively, 38.8% of BIOLASE shares are held by institutional investors. 11.9% of Digirad shares are held by insiders. Comparatively, 7.1% of BIOLASE shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Earnings & Valuation

This table compares Digirad and BIOLASE’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Digirad $125.47 million 0.39 $14.30 million ($0.58) -4.26
BIOLASE $51.81 million 0.59 -$15.37 million ($0.33) -1.21

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

Summary

Digirad beats BIOLASE on 9 of the 14 factors compared between the two stocks.

About Digirad

Digirad Corporation provides healthcare solutions. The Company’s segments include Diagnostic Services, Mobile Healthcare, Diagnostic Imaging and Medical Device Sales and Services. Through Diagnostic Services, the Company offers an imaging services program as an alternative to purchasing equipment or outsourcing the procedures to another physician or imaging center. Through Mobile Healthcare segment, the Company provides contract sales services and diagnostic imaging services. Through Diagnostic Imaging segment, the Company sells its internally developed solid-state gamma camera imaging systems and camera maintenance contracts. Through Medical Device Sales and Services segment, the Company provides contract sales services, as well as warranty and post-warranty services, under contract with Philips Healthcare within a defined region in the upper Midwest region of the United States.

About BIOLASE

BIOLASE, Inc. (BIOLASE) is a medical device company that develops, manufactures, markets and sells laser systems in dentistry and medicine. The Company markets, sells, and distributes dental imaging equipment, including cone beam digital x-rays and computer-aided design (CAD)/computer-aided manufacturing (CAM) intra-oral scanners, in-office, chair-side milling machines and three-dimensional (3-D) printers. It offers two categories of laser system products: WaterLase (all-tissue) systems and Diode (soft tissue) systems. Its brand, WaterLase, uses a combination of water and laser energy to perform procedures performed using drills, scalpels, and other traditional dental instruments for cutting soft and hard tissue. It also offers its Diode laser systems to perform soft tissue, pain therapy, and cosmetic procedures, including teeth whitening. Its Waterlase and Diode systems use disposable laser tips of differing sizes and shapes depending on the procedures being performed.

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