Align Technology (NASDAQ: ALGN) and Zimmer Biomet (NYSE:ZBH) are both large-cap medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, profitability, analyst recommendations, dividends, risk, valuation and institutional ownership.
Volatility and Risk
Align Technology has a beta of 1.48, suggesting that its stock price is 48% more volatile than the S&P 500. Comparatively, Zimmer Biomet has a beta of 1.16, suggesting that its stock price is 16% more volatile than the S&P 500.
Insider and Institutional Ownership
78.4% of Align Technology shares are owned by institutional investors. Comparatively, 86.5% of Zimmer Biomet shares are owned by institutional investors. 1.4% of Align Technology shares are owned by company insiders. Comparatively, 0.7% of Zimmer Biomet shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
This table compares Align Technology and Zimmer Biomet’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Zimmer Biomet pays an annual dividend of $0.96 per share and has a dividend yield of 0.8%. Align Technology does not pay a dividend. Zimmer Biomet pays out 12.0% of its earnings in the form of a dividend. Zimmer Biomet has raised its dividend for 2 consecutive years.
This is a breakdown of recent recommendations for Align Technology and Zimmer Biomet, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Align Technology presently has a consensus price target of $267.20, suggesting a potential downside of 10.34%. Zimmer Biomet has a consensus price target of $137.71, suggesting a potential upside of 20.27%. Given Zimmer Biomet’s higher possible upside, analysts plainly believe Zimmer Biomet is more favorable than Align Technology.
Earnings & Valuation
This table compares Align Technology and Zimmer Biomet’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Align Technology||$1.47 billion||16.21||$231.41 million||$3.89||76.61|
|Zimmer Biomet||$7.82 billion||2.97||$1.81 billion||$8.03||14.26|
Zimmer Biomet has higher revenue and earnings than Align Technology. Zimmer Biomet is trading at a lower price-to-earnings ratio than Align Technology, indicating that it is currently the more affordable of the two stocks.
Zimmer Biomet beats Align Technology on 10 of the 18 factors compared between the two stocks.
About Align Technology
Align Technology, Inc. designs, manufactures, and markets a system of clear aligner therapy, intraoral scanners, and computer-aided design and computer-aided manufacturing (CAD/CAM) digital services. The company's Clear Aligner segment offers Invisalign Full, a treatment used for a range of malocclusion; Invisalign Teen treatment that addresses orthodontic needs of teenage patients, such as compliance indicators, compensation for tooth eruption, and six free single arch replacement aligners; and Invisalign Assist treatment for anterior alignment and aesthetically-oriented cases. It also provides Invisalign Express (10 and 5) and Invisalign Lite/i7 treatments for orthodontic cases, non-comprehensive treatment relapse cases, or straightening prior to restorative or cosmetic treatments; Invisalign Go, a solution for general practitioner dentists (GPs) to identify and treat patients with mild malocclusion; SmileDirectClub aligners for minor tooth movement; custom clear aligner retainers used to maintain tooth position and correct minor relapse; and SmartTrack, a custom-engineered material that delivers force for orthodontic tooth movements. The company's Scanners and Services segment offers iTero Scanner, a single hardware platform with software options for restorative or orthodontic procedures; and Restorative software for iTero, a software for GPs, prosthodontists, periodontists, and oral surgeons. It also provides Orthodontic software for iTero, a software for orthodontists for digital records storage, orthodontic diagnosis, Invisalign digital impression submission, and for the fabrication of printed models and retainers; CAD/CAM services, such as iTero Models and Dies, OrthoCAD iCast, and OrthoCAD iRecord; and Invisalign outcome simulator, a chair-side and cloud-based application for the iTero scanner, as well as third party scanners and digital scans for Invisalign treatment submission. The company was founded in 1997 and is headquartered in San Jose, California.
About Zimmer Biomet
Zimmer Biomet Holdings, Inc., together with its subsidiaries, designs, manufactures, and markets musculoskeletal healthcare products and solutions in the Americas, Europe, the Middle East, Africa, and the Asia Pacific. It operates through four segments: Spine, less Asia Pacific; Office Based Technologies; Craniomaxillofacial and Thoracic; and Dental. The company provides orthopaedic reconstructive products, such as knee and hip replacement products; S.E.T. products, including surgical, sports medicine, biologics, foot and ankle, extremities, and trauma products; spine products comprising medical devices and surgical instruments; and face and skull reconstruction products, as well as products that fixate and stabilize the bones of the chest to facilitate healing or reconstruction after open heart surgery, trauma, or for deformities of the chest. It also offers dental products that include dental reconstructive implants, and dental prosthetic and regenerative products; and bone cement and spinal fusion stimulators. The company's products and solutions are used to treat patients suffering from disorders of, or injuries to, bones, joints, or supporting soft tissues. It serves orthopaedic surgeons, neurosurgeons, oral surgeons, dentists, hospitals, stocking distributors, healthcare dealers, and other specialists, as well as agents, healthcare purchasing organizations, or buying groups. The company was formerly known as Zimmer Holdings, Inc. and changed its name to Zimmer Biomet Holdings, Inc. in June 2015. Zimmer Biomet Holdings, Inc. was founded in 1927 and is headquartered in Warsaw, Indiana.
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