Financial Analysis: Stryker (SYK) versus HeartWare International (HTWR)

Stryker (NYSE: SYK) and HeartWare International (NASDAQ:HTWR) are both healthcare companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Profitability

This table compares Stryker and HeartWare International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Stryker 8.20% 24.56% 11.53%
HeartWare International -15.84% -25.32% -10.14%

Institutional & Insider Ownership

74.5% of Stryker shares are owned by institutional investors. 7.4% of Stryker 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.

Dividends

Stryker pays an annual dividend of $1.88 per share and has a dividend yield of 1.2%. HeartWare International does not pay a dividend. Stryker pays out 70.1% of its earnings in the form of a dividend. HeartWare International has increased its dividend for 7 consecutive years.

Valuation and Earnings

This table compares Stryker and HeartWare International’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Stryker $12.44 billion 4.75 $1.02 billion $2.68 58.91
HeartWare International N/A N/A N/A ($3.40) N/A

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

Analyst Ratings

This is a summary of current recommendations for Stryker and HeartWare International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Stryker 1 7 14 0 2.59
HeartWare International 0 0 0 0 N/A

Stryker currently has a consensus target price of $162.32, indicating a potential upside of 2.81%.

Summary

Stryker beats HeartWare International on 10 of the 12 factors compared between the two stocks.

Stryker Company Profile

Stryker Corporation is a medical technology company. The Company offers a range of medical technologies, including orthopedic, medical and surgical, and neurotechnology and spine products. The Company’s segments include Orthopaedics; MedSurg; Neurotechnology and Spine, and Corporate and Other. The Orthopaedics segment includes reconstructive (hip and knee) and trauma implant systems and other related products. The MedSurg segment includes surgical equipment and surgical navigation systems; endoscopic and communications systems; patient handling, emergency medical equipment, intensive care disposable products; reprocessed and remanufactured medical devices, and other related products. The Neurotechnology and Spine segment includes neurovascular products, spinal implant systems and other related products. The Company’s products include implants, which are used in joint replacement and trauma surgeries, and other products that are used in a range of medical specialties.

HeartWare International Company Profile

Heartware International, Inc. is a medical device company. The Company develops and manufactures miniaturized implantable heart pumps or ventricular assist devices to treat patients suffering from advanced heart failure. The Company operates in the segment of design and manufacture of medical devices. The HeartWare Ventricular Assist System (HVAD System), which includes a ventricular assist device (VAD) or blood pump, patient accessories and surgical tools, provides circulatory support for patients in the advanced stage of heart failure. The HVAD System is designed to be implanted adjacent to the heart, avoiding abdominal surgery. The HVAD System features the centrifugal pump designed to be implanted in the chest, directly adjacent to the heart. It develops MVAD System, a miniaturized device. The CircuLite Surgical System is designed to be implanted through a right, mini-thoracotomy procedure and does not require a sternotomy or cardiopulmonary bypass.

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