Contrasting Merit Medical Systems (MMSI) and Novocure (NVCR)

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Merit Medical Systems (NASDAQ:MMSI) and Novocure (NASDAQ:NVCR) are both mid-cap medical companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, valuation, analyst recommendations, profitability, risk, earnings and institutional ownership.

Profitability

This table compares Merit Medical Systems and Novocure’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Merit Medical Systems 4.72% 10.86% 6.55%
Novocure -25.37% -52.72% -19.72%

Institutional and Insider Ownership

96.0% of Merit Medical Systems shares are held by institutional investors. Comparatively, 58.3% of Novocure shares are held by institutional investors. 5.2% of Merit Medical Systems shares are held by insiders. Comparatively, 15.3% of Novocure shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Volatility and Risk

Merit Medical Systems has a beta of 1.12, meaning that its stock price is 12% more volatile than the S&P 500. Comparatively, Novocure has a beta of 3.25, meaning that its stock price is 225% more volatile than the S&P 500.

Valuation and Earnings

This table compares Merit Medical Systems and Novocure’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Merit Medical Systems $727.85 million 4.59 $27.52 million $1.28 47.56
Novocure $177.03 million 27.96 -$61.66 million ($0.70) -76.01

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

Analyst Recommendations

This is a breakdown of recent recommendations for Merit Medical Systems and Novocure, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Merit Medical Systems 1 0 8 0 2.78
Novocure 0 2 4 0 2.67

Merit Medical Systems currently has a consensus price target of $68.44, indicating a potential upside of 12.43%. Novocure has a consensus price target of $46.50, indicating a potential downside of 12.61%. Given Merit Medical Systems’ stronger consensus rating and higher possible upside, equities analysts plainly believe Merit Medical Systems is more favorable than Novocure.

Summary

Merit Medical Systems beats Novocure on 11 of the 14 factors compared between the two stocks.

Merit Medical Systems Company Profile

Merit Medical Systems, Inc. designs, develops, manufactures, and markets various disposable medical devices for interventional, diagnostic, and therapeutic procedures in cardiology, radiology, oncology, critical care, and endoscopy. The company operates through Cardiovascular and Endoscopy segments. It provides various peripheral intervention products, including access, angiography, intervention, and drainage and biopsy products to alleviate patients suffering from peripheral vascular and non-vascular diseases; and cardiac intervention products to aid in the treatment of various cardiac conditions specific to interventional cardiology and electrophysiology, including cardiac rhythm management and lead management. The company also offers cardiovascular and critical care products comprising infection prevention and safety, and fluid management and monitoring devices. In addition, it provides interventional oncology and spine products, such as vertebral compression fractures; tumor ablation systems; inflation syringes; microspheres for treating hypervascularized tumors and liver cancer; polyvinyl alcohol particles to treat hypervascularized tumors; and microcatheters for the controlled and selective infusion of diagnostic, embolic, or therapeutic agents into vessels. Further, the company offers endoscopy products, such as non-vascular stents, esophageal stents, biliary stent systems, esophageal balloon dilators, inflation devices, and guide wires; and kits and accessories for endoscopy and bronchoscopy procedures. Additionally, it provides coated tubes and wires; and microelectromechanical systems sensor components. The company sells its products to hospitals and clinic-based physicians, technicians, and nurses through its direct sales force, distributors, original equipment manufacturer partners, or custom procedure tray manufacturers in the United States and internationally. Merit Medical Systems, Inc. was founded in 1987 and is headquartered in South Jordan, Utah.

Novocure Company Profile

Novocure Ltd. operates as an oncology company. It enages in developing its propriety technoclogy, Tumor Treating Fields, which uses electric fields tuned to specific frequencies to disrupt cancer cell division, inhibiting tumor growth, and causing affected cancer cells to die. The company was founded by Yoram Palti in 2000 and is headquartered in St. Helier, Jersey.

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