Wright Medical Group (WMGI) vs. Steris (NYSE:STE) Critical Review

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Wright Medical Group (NASDAQ: WMGI) and Steris (NYSE:STE) are both mid-cap medical companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, institutional ownership and earnings.

Dividends

Steris pays an annual dividend of $1.24 per share and has a dividend yield of 1.2%. Wright Medical Group does not pay a dividend. Steris pays out 29.9% of its earnings in the form of a dividend. Steris has raised its dividend for 8 consecutive years.

Earnings & Valuation

This table compares Wright Medical Group and Steris’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Wright Medical Group $744.99 million 3.69 -$202.59 million ($0.22) -118.00
Steris $2.62 billion 3.39 $290.91 million $4.15 25.30

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

Risk and Volatility

Wright Medical Group has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500. Comparatively, Steris has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Wright Medical Group and Steris, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Wright Medical Group 0 2 9 0 2.82
Steris 0 1 3 0 2.75

Wright Medical Group presently has a consensus target price of $29.67, indicating a potential upside of 14.28%. Steris has a consensus target price of $80.25, indicating a potential downside of 23.58%. Given Wright Medical Group’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Wright Medical Group is more favorable than Steris.

Profitability

This table compares Wright Medical Group and Steris’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Wright Medical Group -22.11% -2.58% -0.70%
Steris 11.10% 11.55% 6.93%

Insider & Institutional Ownership

90.7% of Steris shares are owned by institutional investors. 4.0% of Wright Medical Group shares are owned by insiders. Comparatively, 2.4% of Steris shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Summary

Steris beats Wright Medical Group on 10 of the 16 factors compared between the two stocks.

About Wright Medical Group

Wright Medical Group N.V., a medical device company, designs, manufactures, markets, and sells extremities and biologics products. The company offers joint implants and bone fixation devices for the shoulder, elbow, wrist, hand, foot, and ankle; and biologics products that are used for supporting the treatment of damaged or diseased bones, tendons, and soft tissues, as well as to stimulate bone growth. It also provides sports medicines and other products to mechanically repair tissue-to-tissue or tissue-to-bone injuries, as well as other ancillary products. The company primarily offers its products to orthopaedic, trauma, and podiatric surgeons. It markets and sells its products through direct sales representatives and independent sales agencies in the United States, as well as direct sales offices and distributors in approximately 50 countries. The company was founded in 1999 and is headquartered in Amsterdam, the Netherlands.

About Steris

STERIS plc develops, manufactures, and markets infection prevention, contamination control, microbial reduction, and surgical and gastrointestinal support products and services for healthcare, pharmaceutical, scientific, research, industrial, and governmental customers worldwide. The company's Healthcare Products segment offers steam, vaporized hydrogen peroxide, and ethylene oxide sterilizers, as well as liquid chemical sterilant processing systems; automated washer/disinfector systems; general and specialty surgical tables, surgical and examination lights, equipment management systems, operating room storage cabinets, warming cabinets, scrub sinks, and other accessories; and gastrointestinal devices and accessories. It also provides OR integration, OR and sterile processing department, workflow, patient tracking, and instrument management solutions; and cleaning chemistries and sterility assurance products. In addition, this segment offers preventive maintenance and repair, sterilization and surgical management consulting, and remote equipment monitoring services, as well as other support services. The company's Healthcare Specialty Services segment provides solutions, and outsourced and managed services for acute care hospitals and other healthcare settings, including instrument and endoscope repair and maintenance solutions; and custom process improvement consulting services. Its Life Sciences segment offers formulated cleaning chemistries, vaporized hydrogen peroxide generators, high-purity water equipment, steam sterilizers, and washers/disinfectors. The company's Applied Sterilization Technologies segment provides contract sterilization services using gamma, electron beam, and X-ray technologies, as well as ethylene oxide gas; and laboratory testing and validation services. It operates a network of 50 facilities. The company was founded in 1985 and is headquartered in Leicester, the United Kingdom.

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