Critical Comparison: STAAR Surgical (NASDAQ:STAA) and Pro-Dex (NASDAQ:PDEX)

STAAR Surgical (NASDAQ:STAA) and Pro-Dex (NASDAQ:PDEX) are both small-cap medical companies, but which is the better business? We will compare the two companies based on the strength of their valuation, institutional ownership, analyst recommendations, risk, profitability, dividends and earnings.

Analyst Recommendations

This is a summary of current ratings and recommmendations for STAAR Surgical and Pro-Dex, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
STAAR Surgical	2	9	1	0	1.92
Pro-Dex	0	1	1	0	2.50

STAAR Surgical presently has a consensus price target of $20.78, indicating a potential upside of 9.72%. Pro-Dex has a consensus price target of $56.00, indicating a potential upside of 42.13%. Given Pro-Dex’s stronger consensus rating and higher probable upside, analysts plainly believe Pro-Dex is more favorable than STAAR Surgical.

Profitability

This table compares STAAR Surgical and Pro-Dex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
STAAR Surgical	-41.79%	-16.06%	-12.40%
Pro-Dex	15.94%	23.64%	13.73%

Insider & Institutional Ownership

96.7% of STAAR Surgical shares are owned by institutional investors. Comparatively, 15.3% of Pro-Dex shares are owned by institutional investors. 0.6% of STAAR Surgical shares are owned by insiders. Comparatively, 45.9% of Pro-Dex shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

STAAR Surgical has a beta of 1, suggesting that its stock price has a similar volatility profile to the S&P 500.Comparatively, Pro-Dex has a beta of -0.05, suggesting that its stock price is 105% less volatile than the S&P 500.

Earnings and Valuation

This table compares STAAR Surgical and Pro-Dex”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
STAAR Surgical	$313.90 million	3.00	-$20.21 million	($1.95)	-9.71
Pro-Dex	$66.59 million	1.93	$8.98 million	$3.35	11.76

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

Summary

Pro-Dex beats STAAR Surgical on 9 of the 13 factors compared between the two stocks.

About STAAR Surgical

STAAR Surgical Company, together with its subsidiaries, designs, develops, manufactures, markets, and sells implantable lenses for the eye, and companion delivery systems to deliver the lenses into the eye. The company provides implantable Collamer lens product family (ICLs) to treat visual disorders, such as myopia, hyperopia, astigmatism, and presbyopia. It markets its products to health care providers, including ophthalmic surgeons, vision and surgical centers, hospitals, government facilities, and distributors, as well as products are primarily used by ophthalmologists. The company sells its products directly through its sales representatives in the United States, Japan, Germany, Spain, Canada, the United Kingdom, and Singapore, as well as through own representatives and independent distributors in China, Korea, India, France, Benelux, Italy, and internationally. STAAR Surgical Company was incorporated in 1982 and is headquartered in Lake Forest, California.

About Pro-Dex

Pro-Dex, Inc. designs, develops, manufactures, and sells powered surgical instruments for medical device original equipment manufacturers worldwide. The company offers autoclavable, battery-powered and electric, and multi-function surgical drivers and shavers that are primarily used in the orthopedic, thoracic, and craniomaxillofacial markets. It also provides engineering, quality, and regulatory consulting services; and manufactures and sells rotary air motors to various industries. The company's products are used in hospitals, medical engineering labs, scientific research facilities, and high-tech manufacturing operations. Pro-Dex, Inc. was founded in 1978 and is headquartered in Irvine, California.