C R Bard (BCR) versus Steris (STE) Critical Analysis

C R Bard (NYSE: BCR) and Steris (NYSE:STE) are both healthcare companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.

Profitability

This table compares C R Bard and Steris’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
C R Bard 9.51% 19.39% 6.91%
Steris 9.42% 11.57% 6.80%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for C R Bard and Steris, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
C R Bard 0 7 0 0 2.00
Steris 0 2 3 0 2.60

C R Bard currently has a consensus price target of $310.60, indicating a potential downside of 6.23%. Steris has a consensus price target of $80.25, indicating a potential downside of 10.35%. Given C R Bard’s higher probable upside, analysts plainly believe C R Bard is more favorable than Steris.

Dividends

C R Bard pays an annual dividend of $0.78 per share and has a dividend yield of 0.2%. Steris pays an annual dividend of $1.24 per share and has a dividend yield of 1.4%. C R Bard pays out 10.3% of its earnings in the form of a dividend. Steris pays out 43.5% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. C R Bard has increased its dividend for 8 consecutive years and Steris has increased its dividend for 46 consecutive years. Steris is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

79.1% of C R Bard shares are owned by institutional investors. Comparatively, 89.4% of Steris shares are owned by institutional investors. 0.8% of C R Bard shares are owned by insiders. Comparatively, 2.6% of Steris shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Earnings & Valuation

This table compares C R Bard and Steris’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
C R Bard $3.71 billion 6.50 $531.40 million $7.59 43.64
Steris $2.61 billion 2.91 $109.96 million $2.85 31.41

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

Volatility & Risk

C R Bard has a beta of 0.52, meaning that its share price is 48% less volatile than the S&P 500. Comparatively, Steris has a beta of 1.22, meaning that its share price is 22% more volatile than the S&P 500.

Summary

C R Bard beats Steris on 10 of the 17 factors compared between the two stocks.

About C R Bard

C. R. Bard, Inc. (Bard) is engaged in designing, manufacturing, packaging, distribution and sale of medical, surgical, diagnostic and patient care devices. The Company operates through the manufacture and sale of medical devices segment. It sells a range of products to hospitals, individual healthcare professionals, extended care facilities and alternate site facilities on a global basis. Its vascular products cover a range of minimally invasive devices for the treatment of peripheral vascular disease and end-stage renal disease. Its urology products include basic urology drainage products, fecal and urinary continence products, urological specialty products and Targeted Temperature Management products. Its oncology products cover a range of devices used in the treatment and management of various cancers, and other diseases and disorders. Its surgical specialty products include implanted patches and fixation devices for hernia and soft tissue repairs.

About Steris

STERIS plc provides infection prevention and other procedural products and services. The Company operates through four segments: Healthcare Products, which offers infection prevention and procedural solutions for healthcare providers, including capital equipment and related maintenance, and installation services, as well as consumables; Healthcare Specialty Services, which provides a range of specialty services for healthcare providers, including hospital sterilization services, instrument and scope repairs, and linen management; Life Sciences, which offers capital equipment and consumable products, and equipment maintenance and specialty services for pharmaceutical manufacturers and research facilities, and Applied Sterilization Technologies, which offers contract sterilization and laboratory services for medical device and pharmaceutical customers and others. Its Corporate and other segment includes the Defense and Industrial business unit.

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