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 analyst recommendations, valuation, profitability, dividends, institutional ownership, risk and earnings.
Volatility & Risk
Varex Imaging has a beta of 3.16, suggesting that its share price is 216% more volatile than the S&P 500. Comparatively, Medtronic has a beta of 0.97, suggesting that its share price is 3% less volatile than the S&P 500.
Earnings & Valuation
This table compares Varex Imaging and Medtronic’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Varex Imaging||$698.10 million||1.94||$51.60 million||$1.37||26.13|
|Medtronic||$29.71 billion||3.49||$4.03 billion||$2.03||37.71|
Medtronic has higher revenue and earnings than Varex Imaging. Varex Imaging is trading at a lower price-to-earnings ratio than Medtronic, indicating that it is currently the more affordable of the two stocks.
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 raised its dividend for 40 consecutive years.
Institutional and Insider Ownership
93.5% of Varex Imaging shares are held by institutional investors. Comparatively, 81.2% of Medtronic shares are held by institutional investors. 1.6% of Varex Imaging shares are held by company insiders. Comparatively, 0.3% of Medtronic shares are held 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.
This is a summary of current recommendations and price targets for Varex Imaging and Medtronic, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Varex Imaging presently has a consensus target price of $36.00, suggesting a potential upside of 0.56%. Medtronic has a consensus target price of $91.31, suggesting a potential upside of 19.28%. Given Medtronic’s stronger consensus rating and higher probable upside, analysts clearly believe Medtronic is more favorable than Varex Imaging.
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 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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