Financial Review: Meridian Bioscience (VIVO) versus CONMED Corporation (CNMD)

CONMED Corporation (NASDAQ: CNMD) and Meridian Bioscience (NASDAQ:VIVO) are both small-cap medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, valuation, dividends, profitability, earnings, analyst recommendations and risk.

Institutional and Insider Ownership

98.9% of CONMED Corporation shares are held by institutional investors. Comparatively, 87.3% of Meridian Bioscience shares are held by institutional investors. 2.6% of CONMED Corporation shares are held by company insiders. Comparatively, 2.3% of Meridian Bioscience shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares CONMED Corporation and Meridian Bioscience’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CONMED Corporation $772.61 million 1.87 $123.91 million $0.56 92.55
Meridian Bioscience $198.07 million 3.00 $52.80 million $0.51 27.65

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

Risk and Volatility

CONMED Corporation has a beta of 0.68, meaning that its stock price is 32% less volatile than the S&P 500. Comparatively, Meridian Bioscience has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations for CONMED Corporation and Meridian Bioscience, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CONMED Corporation 0 3 1 0 2.25
Meridian Bioscience 1 3 0 0 1.75

CONMED Corporation presently has a consensus target price of $49.33, indicating a potential downside of 4.82%. Meridian Bioscience has a consensus target price of $14.33, indicating a potential upside of 1.65%. Given Meridian Bioscience’s higher probable upside, analysts plainly believe Meridian Bioscience is more favorable than CONMED Corporation.

Dividends

CONMED Corporation pays an annual dividend of $0.80 per share and has a dividend yield of 1.5%. Meridian Bioscience pays an annual dividend of $0.50 per share and has a dividend yield of 3.5%. CONMED Corporation pays out 142.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Meridian Bioscience pays out 98.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Meridian Bioscience is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

This table compares CONMED Corporation and Meridian Bioscience’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CONMED Corporation 2.02% 8.38% 3.66%
Meridian Bioscience 10.77% 16.93% 11.36%

About CONMED Corporation

CONMED Corporation is a medical technology company. The Company is engaged in the development, manufacturing and sale on a global basis of surgical devices and related equipment. The Company provides surgical devices and equipment for minimally invasive procedures. The Company’s products are used by surgeons and physicians in a range of specialties, including orthopedics, general surgery, gynecology, neurosurgery and gastroenterology. The Company’s product lines consist of orthopedic surgery, general surgery and surgical visualization. As of December 31, 2016, the Company’s products are distributed domestically directly to over 6,000 hospitals, surgery centers and other healthcare institutions, as well as through medical specialty distributors. The Company’s orthopedic surgery product lines include sports medicine, powered surgical instruments, and sports biologics and tissue. These products are marketed under a range of brands, including Hall, CONMED Linvatec, Concept and Shutt.

About Meridian Bioscience

Meridian Bioscience, Inc. is a life science company engaged in the development, manufacture, sale and distribution of diagnostic test kits for gastrointestinal, viral, respiratory and parasitic infectious diseases, and elevated blood lead levels, and the manufacture and distribution of bulk antigens, antibodies, polymerase chain reaction (PCR)/quantitative PCR (qPCR) reagents, nucleotides, competent cells and bioresearch reagents used by researchers and other diagnostic manufacturers. Its segments include Diagnostics and Life Science. The Diagnostics segment includes manufacturing operations in Cincinnati, and the sale and distribution of diagnostic test kits in the countries consisting of North, Central and South America; Europe, the Middle East and Africa (EMEA), and other countries outside of the Americas and EMEA. The Life Science segment consists of manufacturing operations in Memphis, Tennessee; Boca Raton, Florida; London, England; Luckenwalde, Germany, and Sydney, Australia.

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