Critical Review: St Jude Medical (STJ) and Orthopediatrics (KIDS)

St Jude Medical (NYSE: STJ) and Orthopediatrics (NASDAQ:KIDS) are both healthcare companies, but which is the superior business? We will contrast the two companies based on the strength of their profitability, institutional ownership, dividends, valuation, analyst recommendations, earnings and risk.

Dividends

St Jude Medical pays an annual dividend of $1.24 per share and has a dividend yield of 1.5%. Orthopediatrics does not pay a dividend. St Jude Medical pays out 54.4% of its earnings in the form of a dividend. Orthopediatrics has raised its dividend for 7 consecutive years.

Earnings and Valuation

This table compares St Jude Medical and Orthopediatrics’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
St Jude Medical N/A N/A N/A $2.28 35.45
Orthopediatrics N/A N/A N/A $0.96 19.96

Orthopediatrics is trading at a lower price-to-earnings ratio than St Jude Medical, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

82.7% of St Jude Medical shares are held by institutional investors. 4.8% of St Jude Medical shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a summary of recent ratings and target prices for St Jude Medical and Orthopediatrics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
St Jude Medical 0 0 0 0 N/A
Orthopediatrics 0 0 4 0 3.00

Orthopediatrics has a consensus price target of $23.67, suggesting a potential upside of 23.52%. Given Orthopediatrics’ higher possible upside, analysts clearly believe Orthopediatrics is more favorable than St Jude Medical.

Profitability

This table compares St Jude Medical and Orthopediatrics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
St Jude Medical 14.14% 19.40% 6.75%
Orthopediatrics N/A N/A N/A

Summary

St Jude Medical beats Orthopediatrics on 8 of the 12 factors compared between the two stocks.

About St Jude Medical

St. Jude Medical, Inc. is focused on the development, manufacture and distribution of cardiovascular medical devices for the global cardiac rhythm management, cardiovascular and atrial fibrillation therapy areas, and interventional pain therapy and neurostimulation devices for the management of chronic pain and movement disorders. The Company’s product categories include tachycardia implantable cardioverter defibrillator systems; atrial fibrillation products (electrophysiology introducers and catheters, advanced cardiac mapping, navigation and recording systems and ablation systems); bradycardia pacemaker systems; vascular products (vascular closure products, pressure measurement guidewires, optical coherence tomography imaging products, vascular plugs, heart failure monitoring devices and other vascular accessories); structural heart products (heart valve replacement and repair products and structural heart defect devices); neuromodulation products, and Thoratec products.

About Orthopediatrics

OrthoPediatrics Corp. is a United States-based medical device company. The Company designs, develops and commercializes orthopedic implants and instruments to meet the specialized needs of pediatric surgeons and their patients. It operates through the OrthoPediatrics segment, which designs, develops and markets implants and devices for children with orthopedic problems. Its products include RESPONSE Spinal Deformity System, PediNail Intramedullary Nail System, PediLoc Plating Systems, ACL Reconstruction System, Locking Cannulated Blade (LCB) plate system, Locking Proximal Femur (LPF) plate system, PediFlex Flexible Nailing System, PediFrag, PediLoc Extension Osteotomy Plate (PLEO), PediLoc Femur Locking Plate System, PediLoc Tibia Locking Plate System, PediPlates system and Spica Table. It markets over 20 surgical systems that serve approximately three categories within pediatric orthopedic market, including trauma and deformity, complex spine and anterior cruciate ligament reconstruct

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