Head-To-Head Comparison: Cantel Medical (NYSE:CMD) vs. Stryker (SYK)

Cantel Medical (NYSE: CMD) and Stryker (NYSE:SYK) are both medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, valuation, institutional ownership and earnings.

Earnings and Valuation

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This table compares Cantel Medical and Stryker’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Cantel Medical $770.16 million 6.00 $71.37 million $2.08 53.25
Stryker $12.44 billion 4.77 $1.02 billion $6.49 24.43

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

Volatility and Risk

Cantel Medical has a beta of 1.26, meaning that its share price is 26% more volatile than the S&P 500. Comparatively, Stryker has a beta of 0.7, meaning that its share price is 30% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Cantel Medical and Stryker, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cantel Medical 0 2 1 0 2.33
Stryker 1 8 15 0 2.58

Cantel Medical presently has a consensus target price of $92.00, indicating a potential downside of 16.93%. Stryker has a consensus target price of $164.71, indicating a potential upside of 3.88%. Given Stryker’s stronger consensus rating and higher probable upside, analysts clearly believe Stryker is more favorable than Cantel Medical.

Profitability

This table compares Cantel Medical and Stryker’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cantel Medical 10.92% 17.18% 11.19%
Stryker 8.20% 24.56% 11.53%

Insider and Institutional Ownership

85.2% of Cantel Medical shares are held by institutional investors. Comparatively, 75.7% of Stryker shares are held by institutional investors. 12.3% of Cantel Medical shares are held by insiders. Comparatively, 7.4% of Stryker shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Cantel Medical pays an annual dividend of $0.17 per share and has a dividend yield of 0.2%. Stryker pays an annual dividend of $1.88 per share and has a dividend yield of 1.2%. Cantel Medical pays out 8.2% of its earnings in the form of a dividend. Stryker pays out 29.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Stryker has raised its dividend for 7 consecutive years. Stryker is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Stryker beats Cantel Medical on 10 of the 17 factors compared between the two stocks.

About Cantel Medical

Cantel Medical Corp. provides infection prevention products and services for the healthcare market worldwide. The company operates through four segments: Endoscopy, Water Purification and Filtration, Healthcare Disposables, and Dialysis. The Endoscopy segment offers automated endoscope reprocessing systems; detergents; leak testing and manual cleaning products; storage cabinets; transport systems; mobile medical carts; endoscope process tracking products; other consumables, accessories, and supplies for use in disinfect rigid and flexible endoscopes, and other instrumentation; cleaning and disinfecting reusable components used in gastrointestinal endoscopy procedures; and technical maintenance services. The Water Purification and Filtration segment provides water purification systems; bicarbonate systems; hollow fiber filters; filtration and separation, liquid disinfectants and cold sterilization, and dry fog products; and room temperature sterilizers for the dialysis and specific healthcare applications, research laboratories and pharmaceutical, food and beverage, and commercial industrial customers. The Healthcare Disposables segment offers biological and chemical integrators, sterilization pouches, towels, bibs, tray liners and sponges, nitrous oxide/oxygen sedation equipment and related single-use disposable nasal masks, face masks, shields, hand sanitizers, germicidal wipes, surface disinfectants, saliva ejectors, evacuator tips and plastic cups, and prophy angles and pastes, as well as waterline treatment products for maintaining safe dental unit waterlines. The Dialysis segment provides medical device reprocessing systems, sterilants/disinfectants, dialysate concentrates, and other supplies for renal dialysis. The company sells its products through its direct distribution network in the United States; and directly or under third-party distribution agreements internationally. The company was founded in 1963 and is headquartered in Little Falls, New Jersey.

About Stryker

Stryker Corporation operates as a medical technology company. The company operates through three segments: Orthopaedics, MedSurg, and Neurotechnology and Spine. The Orthopaedics segment provides implants for use in hip and knee joint replacements, and trauma and extremities surgeries. The MedSurg segment offers surgical equipment and surgical navigation systems, endoscopic and communications systems, patient handling, emergency medical equipment and intensive care disposable products, reprocessed and remanufactured medical devices, and other medical devices for use in various medical specialties. The Neurotechnology and Spine segment provides neurotechnology products that include products used for minimally invasive endovascular techniques; products for brain and open skull based surgical procedures; orthobiologic and biosurgery products, such as synthetic bone grafts and vertebral augmentation products; and minimally invasive products for the treatment of acute ischemic and hemorrhagic stroke. It also provides spinal implant products comprising cervical, thoracolumbar, and interbody systems for use in spinal injury, deformity, and degenerative therapies. The company sells its products to doctors, hospitals, and other healthcare facilities through company-owned sales subsidiaries and branches, as well as third-party dealers and distributors in approximately 85 countries. Stryker Corporation was founded in 1941 and is headquartered in Kalamazoo, Michigan.

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