Head-To-Head Comparison: ResMed (NYSE:RMD) and Novocure (NYSE:NVCR)

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ResMed (NYSE:RMD) and Novocure (NASDAQ:NVCR) are both medical companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, earnings, dividends, risk, analyst recommendations, valuation and institutional ownership.

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
ResMed $2.34 billion 7.58 $315.58 million $3.53 35.05
Novocure $248.07 million 26.83 -$63.56 million ($0.69) -100.72

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

Insider & Institutional Ownership

67.1% of ResMed shares are owned by institutional investors. Comparatively, 65.4% of Novocure shares are owned by institutional investors. 1.2% of ResMed shares are owned by insiders. Comparatively, 5.6% of Novocure shares are owned 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.

Profitability

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

Net Margins Return on Equity Return on Assets
ResMed 17.65% 26.46% 14.91%
Novocure -20.42% -47.23% -16.47%

Analyst Recommendations

This is a breakdown of current ratings and price targets for ResMed and Novocure, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
ResMed 0 3 3 0 2.50
Novocure 0 3 4 0 2.57

ResMed currently has a consensus price target of $111.33, suggesting a potential downside of 10.01%. Novocure has a consensus price target of $52.71, suggesting a potential downside of 24.15%. Given ResMed’s higher probable upside, equities analysts plainly believe ResMed is more favorable than Novocure.

Dividends

ResMed pays an annual dividend of $1.48 per share and has a dividend yield of 1.2%. Novocure does not pay a dividend. ResMed pays out 41.9% of its earnings in the form of a dividend. ResMed has increased its dividend for 3 consecutive years.

Volatility & Risk

ResMed has a beta of 0.46, indicating that its share price is 54% less volatile than the S&P 500. Comparatively, Novocure has a beta of 2.45, indicating that its share price is 145% more volatile than the S&P 500.

Summary

ResMed beats Novocure on 11 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; data communications and control products, such as AirView Diagnostics, EasyCare, ResLink, ResControl, ResControl II, TxControl, ResScan, and ResTraxx modules; U-Sleep, which enables automated patient coaching through a text, email, or interactive voice phone call; and myAir, a patient engagement application that provides sleep data and a daily score based on their previous night's data, as well as offers business management software and services to medical equipment and home health providers. 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.

Novocure Company Profile

Novocure Ltd. is global oncology company, which engages in the development and commercialization of its innovative therapy. It focuses on the commercial adoption of Optune, and its Tumor Treating Fields delivery system, for the treatment of glioblastoma (GBM), and to advance programs testing the efficacy and safety of Optune in multiple solid tumor indications through clinical pipeline. The company was founded by Yoram Palti in 2000 and is headquartered in St. Helier, Jersey.

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