Financial Analysis: ResMed (RMD) versus Valeritas (VLRX)

Share on StockTwits

ResMed (NASDAQ: VLRX) and Valeritas (NASDAQ:VLRX) are both medical companies, but which is the better business? We will contrast the two businesses based on the strength of their earnings, profitability, risk, valuation, analyst recommendations, institutional ownership and dividends.

Dividends

ResMed pays an annual dividend of $1.48 per share and has a dividend yield of 1.4%. Valeritas does not pay a dividend. ResMed pays out 41.9% of its earnings in the form of a dividend. ResMed has raised its dividend for 2 consecutive years.

Analyst Ratings

This is a summary of current recommendations for ResMed and Valeritas, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ResMed 3 5 3 0 2.00
Valeritas 0 1 2 0 2.67

ResMed presently has a consensus price target of $68.80, suggesting a potential downside of 35.58%. Valeritas has a consensus price target of $3.75, suggesting a potential upside of 162.24%. Given Valeritas’ stronger consensus rating and higher possible upside, analysts clearly believe Valeritas is more favorable than ResMed.

Institutional and Insider Ownership

62.7% of ResMed shares are owned by institutional investors. Comparatively, 4.3% of Valeritas shares are owned by institutional investors. 1.8% of ResMed shares are owned by insiders. Comparatively, 1.8% of Valeritas shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Volatility and Risk

ResMed has a beta of 0.89, meaning that its stock price is 11% less volatile than the S&P 500. Comparatively, Valeritas has a beta of 4.55, meaning that its stock price is 355% more volatile than the S&P 500.

Profitability

This table compares ResMed and Valeritas’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
ResMed 13.49% 24.74% 14.85%
Valeritas -205.12% -1,768.69% -94.08%

Earnings & Valuation

This table compares ResMed and Valeritas’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ResMed $2.34 billion 6.51 $315.58 million $3.53 30.25
Valeritas $20.25 million 1.76 -$49.30 million ($8.29) -0.17

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

Summary

ResMed beats Valeritas on 12 of the 17 factors compared between the two stocks.

ResMed Company Profile

ResMed Inc. develops, manufactures, distributes, and markets medical devices and cloud-based software applications that diagnose, treat, and manage respiratory disorders comprising sleep disordered breathing, chronic obstructive pulmonary disease, neuromuscular disease, and other chronic diseases. It offers various products and solutions for a range of respiratory disorders, including technologies to be applied in medical and consumer products, ventilation devices, diagnostic products, mask systems for use in the hospital and home, headgear and other accessories, dental devices, portable oxygen concentrators, and cloud-based software informatics solutions to manage patient outcomes, as well as provides customer and business processes. The company also provides humidifiers, carry bags, and breathing circuits; and data communications and control products, such as EasyCare, ResLink, ResControl, ResControl II, TxControl, ResScan, and ResTraxx modules that facilitate the transfer of data and other information to and from the flow generators. It markets its products to sleep clinics, home healthcare dealers, patients, hospitals, physicians, and third-party payers through a network of distributors and direct sales force in approximately 120 countries. ResMed Inc. was founded in 1989 and is headquartered in San Diego, California.

Valeritas Company Profile

Valeritas Holdings, Inc., a commercial-stage medical technology company, focuses on the development and commercialization of technologies to treat patients with Type 2 diabetes in the United States and China. It offers V-Go, a wearable insulin delivery device for basal-bolus therapy. The company also develops h-Patch, a controlled delivery technology platform; Mini-Ject technology for needle-free injection systems; and Micro-Trans technology for microneedle design, fabrication, and drug delivery. In addition, its products include V-Go Prefill, which is in the design-development stage for eliminating the device-filling process and the need for EZ fill refrigeration for patients with Type 2 diabetes; and V-Go Link that is in the early stages of development for real-time tracking information of basal and bolus dosing utilization. The company sells V-Go to third-party wholesalers and medical supply distributors in the United States. Valeritas Holdings, Inc. was founded in 2006 and is headquartered in Bridgewater, New Jersey.

Receive News & Ratings for ResMed Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for ResMed and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply