CareFusion (NYSE: CFN) and Steris Plc (NYSE:STE) are both healthcare companies, but which is the superior business? We will contrast the two businesses based on the strength of their valuation, institutional ownership, analyst recommendations, dividends, profitability, risk and earnings.

Insider and Institutional Ownership

94.7% of Steris Plc shares are owned by institutional investors. 2.6% of Steris Plc 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.

Analyst Recommendations

This is a summary of current recommendations for CareFusion and Steris Plc, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
CareFusion 0 0 0 0 N/A
Steris Plc 0 2 3 0 2.60

Steris Plc has a consensus price target of $85.00, indicating a potential downside of 0.54%. Given Steris Plc’s higher possible upside, analysts clearly believe Steris Plc is more favorable than CareFusion.

Dividends

Steris Plc pays an annual dividend of $1.24 per share and has a dividend yield of 1.5%. CareFusion does not pay a dividend. Steris Plc pays out 88.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Steris Plc has raised its dividend for 7 consecutive years.

Earnings and Valuation

This table compares CareFusion and Steris Plc’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
CareFusion N/A N/A N/A N/A N/A
Steris Plc $2.58 billion 2.82 $521.33 million $1.40 61.04

Steris Plc has higher revenue and earnings than CareFusion.

Profitability

This table compares CareFusion and Steris Plc’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
CareFusion 16.18% 12.80% 7.62%
Steris Plc 4.63% 11.39% 6.54%

Summary

Steris Plc beats CareFusion on 7 of the 11 factors compared between the two stocks.

About CareFusion

CareFusion Corporation is a global medical technology company. The Company operates in two business segments: Medical Systems and Procedural Solutions. The Company’s primary product brands include: Alaris intravenous (IV) infusion systems; Pyxis and Rowa automated medication dispensing and supply management systems; AVEA, Vela and LTV Series respiratory ventilators; ChloraPrep skin antiseptic products; MaxGuard, MaxPlus, MaxZero, SmartSite and Texium needle-free IV infusion valves, administration sets and accessories; V. Mueller and Snowden-Pencer open surgical and laparoscopic instrumentation; PleurX, Achieve and Temno interventional specialty products; AirLife disposable ventilator circuits and oxygen masks used for providing respiratory therapy; Vital Signs single-use consumables for respiratory care and anesthesiology; Jaeger and SensorMedics cardiopulmonary diagnostic equipment, and MedMined data mining surveillance software and analytics.

About Steris Plc

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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