Financial Survey: Steris (STE) vs. AtriCure (ATRC)

AtriCure (NASDAQ: ATRC) and Steris (NYSE:STE) are both medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, valuation, risk, profitability, analyst recommendations and dividends.

Institutional & Insider Ownership

86.2% of AtriCure shares are held by institutional investors. Comparatively, 89.5% of Steris shares are held by institutional investors. 10.0% of AtriCure shares are held by insiders. Comparatively, 2.6% of Steris shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of current recommendations and price targets for AtriCure and Steris, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AtriCure 0 1 6 0 2.86
Steris 0 1 3 0 2.75

AtriCure currently has a consensus target price of $24.67, suggesting a potential upside of 33.62%. Steris has a consensus target price of $72.33, suggesting a potential downside of 17.74%. Given AtriCure’s stronger consensus rating and higher probable upside, equities analysts clearly believe AtriCure is more favorable than Steris.

Valuation & Earnings

This table compares AtriCure and Steris’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
AtriCure $155.11 million 4.10 -$33.33 million ($1.02) -18.10
Steris $2.61 billion 2.86 $109.96 million $1.68 52.34

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

Dividends

Steris pays an annual dividend of $1.24 per share and has a dividend yield of 1.4%. AtriCure does not pay a dividend. Steris pays out 73.8% of its earnings in the form of a dividend. AtriCure has raised its dividend for 7 consecutive years.

Profitability

This table compares AtriCure and Steris’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AtriCure -19.40% -20.28% -12.20%
Steris 5.59% 11.49% 6.65%

Volatility & Risk

AtriCure has a beta of 0.65, indicating that its share price is 35% less volatile than the S&P 500. Comparatively, Steris has a beta of 1.27, indicating that its share price is 27% more volatile than the S&P 500.

Summary

Steris beats AtriCure on 9 of the 16 factors compared between the two stocks.

AtriCure Company Profile

AtriCure, Inc. is an atrial fibrillation (Afib) solutions company. The Company develops, manufactures, and sells devices designed primarily for the surgical ablation of cardiac tissue and systems designed for the exclusion of the left atrial appendage. It has various product lines for the ablation of cardiac tissue, including its Isolator Synergy Ablation System, for the treatment of persistent and longstanding persistent forms of Afib in patients undergoing certain open concomitant procedures. It has two primary product lines for cardiac tissue ablation, which include Radio Frequency Ablation Devices and cryoICE Cryoablation System, and a product line for left atrial appendage exclusion. The Company also sells Lumitip dissectors and the Estech line of reusable cardiac surgery (valve) instruments. Its cryoICE cryosurgery product line offers various cryoablation devices. Its AtriClip Left Atrial Appendage Exclusion System is designed to occlude the heart’s left atrial appendage (LAA).

Steris Company Profile

STERIS plc provides infection prevention and other procedural products and services. The Company operates through four segments: Healthcare Products, which offers infection prevention and procedural solutions for healthcare providers, including capital equipment and related maintenance, and installation services, as well as consumables; Healthcare Specialty Services, which provides a range of specialty services for healthcare providers, including hospital sterilization services, instrument and scope repairs, and linen management; Life Sciences, which offers capital equipment and consumable products, and equipment maintenance and specialty services for pharmaceutical manufacturers and research facilities, and Applied Sterilization Technologies, which offers contract sterilization and laboratory services for medical device and pharmaceutical customers and others. Its Corporate and other segment includes the Defense and Industrial business unit.

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