Varex Imaging (NASDAQ: VREX) and Medtronic (NYSE:MDT) are both medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their risk, institutional ownership, profitability, dividends, valuation, analyst recommendations and earnings.
Earnings and Valuation
This table compares Varex Imaging and Medtronic’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Varex Imaging||$698.10 million||1.95||$51.60 million||$1.37||26.32|
|Medtronic||$29.71 billion||3.54||$4.03 billion||$2.03||38.19|
This table compares Varex Imaging and Medtronic’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Medtronic pays an annual dividend of $1.84 per share and has a dividend yield of 2.4%. Varex Imaging does not pay a dividend. Medtronic pays out 90.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Varex Imaging has increased its dividend for 40 consecutive years.
This is a breakdown of recent ratings and price targets for Varex Imaging and Medtronic, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Varex Imaging presently has a consensus price target of $36.00, suggesting a potential downside of 0.17%. Medtronic has a consensus price target of $91.31, suggesting a potential upside of 17.78%. Given Medtronic’s stronger consensus rating and higher possible upside, analysts plainly believe Medtronic is more favorable than Varex Imaging.
Insider & Institutional Ownership
93.5% of Varex Imaging shares are owned by institutional investors. Comparatively, 81.2% of Medtronic shares are owned by institutional investors. 1.6% of Varex Imaging shares are owned by company insiders. Comparatively, 0.3% of Medtronic shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.
Risk & Volatility
Varex Imaging has a beta of 3.16, suggesting that its stock price is 216% more volatile than the S&P 500. Comparatively, Medtronic has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500.
Medtronic beats Varex Imaging on 10 of the 16 factors compared between the two stocks.
About Varex Imaging
Varex Imaging Corporation is a supplier of medical X-ray tubes and image processing solutions. The Company’s segments include Medical and Industrial. The X-ray imaging system manufacturers use the Company’s components for medical imaging, cargo screening and border security, to detect, diagnose and protect. The Medical business segment designs, manufactures, sells and services X-ray imaging components for use in a range of applications, including radiographic or fluoroscopic imaging, mammography, special procedures, computed tomography, radiation therapy and computer-aided detection. The Industrial business segment designs, manufactures, sells and services products for use in security and industrial inspection applications, such as cargo screening at ports and borders and non-destructive examination in a range of applications.
Medtronic Public Limited Company (Medtronic) is a medical technology and services company. The Company develops, manufactures and markets its medical devices and technologies to hospitals, physicians, clinicians and patients in approximately 160 countries. The Company operates in four segments: Cardiac and Vascular Group, Minimally Invasive Technologies Group, Restorative Therapies Group and Diabetes Group. The Cardiac and Vascular Group segment includes Cardiac Rhythm & Heart Failure, Coronary & Structural Heart and Aortic & Peripheral Vascula. Its Minimally Invasive Technologies Group segment includes Surgical Solutions and Patient Monitoring and Recovery. Its Restorative Therapies Group segment includes Spine, Neuromodulation, Surgical Technologies and Neurovascular. Its Diabetes Group segment includes Intensive Insulin Management, Non-Intensive Diabetes Therapies and Diabetes Services & Solutions. The Company’s subsidiaries include Medtronic, Inc. and HeartWare International, Inc.
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