Nevro Corp. (NYSE: NVRO) and Hill-Rom Holdings (NYSE:HRC) are both mid-cap medical companies, but which is the superior stock? We will contrast the two businesses based on the strength of their valuation, institutional ownership, risk, dividends, earnings, profitability and analyst recommendations.

Dividends

Hill-Rom Holdings pays an annual dividend of $0.72 per share and has a dividend yield of 1.0%. Nevro Corp. does not pay a dividend. Hill-Rom Holdings pays out 41.6% of its earnings in the form of a dividend. Nevro Corp. has raised its dividend for 6 consecutive years.

Valuation & Earnings

This table compares Nevro Corp. and Hill-Rom Holdings’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Nevro Corp. $277.91 million 9.19 -$22.57 million ($1.38) -62.87
Hill-Rom Holdings $2.71 billion 1.81 $465.30 million $1.73 42.94

Hill-Rom Holdings has higher revenue and earnings than Nevro Corp.. Nevro Corp. is trading at a lower price-to-earnings ratio than Hill-Rom Holdings, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a summary of recent recommendations for Nevro Corp. and Hill-Rom Holdings, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Nevro Corp. 0 1 5 0 2.83
Hill-Rom Holdings 0 1 4 0 2.80

Nevro Corp. presently has a consensus price target of $101.33, indicating a potential upside of 16.80%. Hill-Rom Holdings has a consensus price target of $87.80, indicating a potential upside of 18.19%. Given Hill-Rom Holdings’ higher possible upside, analysts clearly believe Hill-Rom Holdings is more favorable than Nevro Corp..

Profitability

This table compares Nevro Corp. and Hill-Rom Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Nevro Corp. -14.33% -16.25% -9.43%
Hill-Rom Holdings 4.27% 19.99% 5.73%

Institutional and Insider Ownership

84.3% of Hill-Rom Holdings shares are owned by institutional investors. 12.1% of Nevro Corp. shares are owned by insiders. Comparatively, 2.2% of Hill-Rom Holdings shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Risk and Volatility

Nevro Corp. has a beta of -0.68, indicating that its share price is 168% less volatile than the S&P 500. Comparatively, Hill-Rom Holdings has a beta of 1.22, indicating that its share price is 22% more volatile than the S&P 500.

Summary

Hill-Rom Holdings beats Nevro Corp. on 10 of the 16 factors compared between the two stocks.

Nevro Corp. Company Profile

Nevro Corp. is a global medical device company. The Company focuses on providing products that improve the quality of life of patients suffering from chronic pain. The Company has developed and commercialized the Senza spinal cord stimulation (SCS) system, an evidence-based neuromodulation platform for the treatment of chronic pain. Its HF10 therapy is designed to deliver neuromodulation solutions for treating chronic pain. HF10 therapy enables patients to achieve sustained pain relief without paresthesia, thus enabling its patients to avoid the uncomfortable shocking or jolting sensations commonly associated with paresthesia. HF10 therapy relies on consistent anatomical lead placement. As of December 31, 2016, it was investigating the use of HF10 therapy to address additional indications, such as chronic upper limb and neck pain, painful neuropathies and non-surgical refractory back pain. The Senza system is approved to create electrical impulses from 2 hertz (Hz) to 10,000 Hz.

Hill-Rom Holdings Company Profile

Hill-Rom Holdings, Inc. is a global medical technology company. The Company operates through four segments: North America Patient Support Systems, International Patient Support Systems, Front Line Care and Surgical Solutions. The Company’s products and services include Patient Support Systems, Front Line Care and Surgical Solutions. The Company sells and rents its specialty frames and surfaces, and mobility solutions, as well as its clinical workflow solutions, in the United States and Canada through its North America Patient Support Systems segment, and in regions outside of the United States and Canada through its International Patient Support Systems segment. Its Front Line Care segment globally sells and rents respiratory care products, and sells medical diagnostic equipment and a diversified portfolio of devices that assess, diagnose, treat and manage a range of illnesses and diseases. Under its Surgical Solutions segment, the Company sells its surgical products globally.

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