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

Profitability

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

Net Margins Return on Equity Return on Assets
HeartWare International -15.84% -25.32% -10.14%
RTI Surgical -6.53% 2.07% 0.94%

Institutional and Insider Ownership

70.0% of RTI Surgical shares are owned by institutional investors. 4.9% of RTI Surgical shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
HeartWare International N/A N/A N/A ($3.40) -17.05
RTI Surgical $279.95 million 0.96 $15.45 million ($0.38) -11.97

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

Analyst Recommendations

This is a breakdown of recent ratings and target prices for HeartWare International and RTI Surgical, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HeartWare International 0 0 0 0 N/A
RTI Surgical 0 0 0 0 N/A

Risk and Volatility

HeartWare International has a beta of 0.3, suggesting that its stock price is 70% less volatile than the S&P 500. Comparatively, RTI Surgical has a beta of 1.77, suggesting that its stock price is 77% more volatile than the S&P 500.

Summary

RTI Surgical beats HeartWare International on 8 of the 8 factors compared between the two stocks.

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.

RTI Surgical Company Profile

RTI Surgical, Inc. is engaged in producing orthopedic and other surgical implants that repair and promote the natural healing of human bone and other human tissues. The Company uses natural tissues, metals and synthetics process to produce its products. The Company’s business primarily consists of six categories, such as spine, sports medicine, ortho fixation, bone graft substitutes and general orthopedic (BGS and general orthopedic), dental and surgical specialties. It processes donated human musculoskeletal and other tissue, including bone, cartilage, tendon, ligament, fascia lata, pericardium, sclera and dermal tissue, and bovine and porcine animal tissue in producing allograft and xenograft implants utilizing BIOCLEANSE, TUTOPLAST and CANCELLE SP sterilization processes, and manufactures metal and synthetic implants for distribution to hospitals and surgeons. The Company distributes its implants and services in approximately 50 states and in over 45 countries across the world.

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