Critical Survey: Fresenius Medical Care AG & Co. KGaA (NYSE:FMS) and Tactile Systems Technology (NASDAQ:TCMD)

Tactile Systems Technology (NASDAQ:TCMD) and Fresenius Medical Care AG & Co. KGaA (NYSE:FMS) are both medical companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, risk, earnings, institutional ownership, profitability, dividends and analyst recommendations.

Risk and Volatility

Tactile Systems Technology has a beta of 0.91, suggesting that its stock price is 9% less volatile than the S&P 500. Comparatively, Fresenius Medical Care AG & Co. KGaA has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500.

Earnings & Valuation

This table compares Tactile Systems Technology and Fresenius Medical Care AG & Co. KGaA”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tactile Systems Technology	$292.98 million	2.28	$16.96 million	$0.77	38.78
Fresenius Medical Care AG & Co. KGaA	$20.63 billion	N/A	$582.08 million	$1.37	16.31

Fresenius Medical Care AG & Co. KGaA has higher revenue and earnings than Tactile Systems Technology. Fresenius Medical Care AG & Co. KGaA is trading at a lower price-to-earnings ratio than Tactile Systems Technology, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

83.4% of Tactile Systems Technology shares are owned by institutional investors. Comparatively, 8.4% of Fresenius Medical Care AG & Co. KGaA shares are owned by institutional investors. 2.5% of Tactile Systems Technology shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Tactile Systems Technology and Fresenius Medical Care AG & Co. KGaA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tactile Systems Technology	5.83%	8.84%	6.54%
Fresenius Medical Care AG & Co. KGaA	3.72%	7.42%	3.43%

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Tactile Systems Technology and Fresenius Medical Care AG & Co. KGaA, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tactile Systems Technology	0	3	2	1	2.67
Fresenius Medical Care AG & Co. KGaA	3	4	0	0	1.57

Tactile Systems Technology currently has a consensus target price of $28.75, indicating a potential downside of 3.72%. Fresenius Medical Care AG & Co. KGaA has a consensus target price of $28.00, indicating a potential upside of 25.34%. Given Fresenius Medical Care AG & Co. KGaA’s higher possible upside, analysts clearly believe Fresenius Medical Care AG & Co. KGaA is more favorable than Tactile Systems Technology.

Summary

Tactile Systems Technology beats Fresenius Medical Care AG & Co. KGaA on 10 of the 14 factors compared between the two stocks.

About Tactile Systems Technology

Tactile Systems Technology, Inc., a medical technology company, develops and provides medical devices to treat underserved chronic diseases in the United States. It offers Flexitouch Plus system, a pneumatic compression device for the treatment of lymphedema in the home setting; and Entre Plus System, a portable pneumatic compression device for the at-home treatment of venous disorders, such as lymphedema and chronic venous insufficiency, including venous leg ulcers. The company also provides Kylee, a mobile application to help patients learn about lymphedema, track their symptoms, and treatment, as well as to share their progress with their doctor; and AffloVest, a portable high frequency chest wall oscillation vest to treat patients with retained pulmonary secretions resulting from bronchiectasis, cystic fibrosis, and various neuromuscular disorders. Tactile Systems Technology, Inc. was incorporated in 1995 and is headquartered in Minneapolis, Minnesota.

About Fresenius Medical Care AG & Co. KGaA

Fresenius Medical Care AG provides dialysis and related services for individuals with renal diseases in Germany, North America, and internationally. The company offers dialysis treatment and related laboratory and diagnostic services through a network of outpatient dialysis clinics; materials, training, and patient support services comprising clinical monitoring, follow-up assistance, and arranging for delivery of the supplies to the patient's residence; and dialysis services under contract to hospitals in the United States for the hospitalized end-stage renal disease (ESRD) patients and for patients suffering from acute kidney failure. It also develops, manufactures, and distributes various health care products, including polysulfone dialyzers, hemodialysis machines, peritoneal dialysis cyclers, peritoneal dialysis solutions, hemodialysis concentrates, solutions and granulates, bloodlines, renal pharmaceuticals, systems for water treatment, and acute cardiopulmonary and apheresis products. In addition, the company develops, acquires, and in-licenses renal pharmaceuticals; offers renal medications and supplies to patients at homes or to dialysis clinics; and provides vascular, cardiovascular, endovascular specialty, vascular care ambulatory surgery center, and physician nephrology and cardiology services. The company sells its products to dialysis clinics, hospitals, and specialized treatment clinics directly, as well as through local sales forces, independent distributors, dealers, and sales agents. Fresenius Medical Care AG was incorporated in 1996 and is headquartered in Bad Homburg, Germany.