St Jude Medical (NYSE: STJ) and Smith & Nephew SNATS (NYSE:SNN) are both healthcare companies, but which is the better business? We will compare the two companies based on the strength of their risk, institutional ownership, valuation, dividends, analyst recommendations, profitability and earnings.

Insider and Institutional Ownership

82.7% of St Jude Medical shares are owned by institutional investors. Comparatively, 6.4% of Smith & Nephew SNATS shares are owned by institutional investors. 4.8% of St Jude Medical shares are owned by insiders. Comparatively, 1.0% of Smith & Nephew SNATS shares are owned by 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.

Volatility & Risk

St Jude Medical has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500. Comparatively, Smith & Nephew SNATS has a beta of 0.75, meaning that its share price is 25% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for St Jude Medical and Smith & Nephew SNATS, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
St Jude Medical 0 2 1 0 2.33
Smith & Nephew SNATS 0 4 2 0 2.33

St Jude Medical currently has a consensus price target of $76.00, suggesting a potential downside of 5.96%. Given St Jude Medical’s higher probable upside, analysts clearly believe St Jude Medical is more favorable than Smith & Nephew SNATS.

Earnings and Valuation

This table compares St Jude Medical and Smith & Nephew SNATS’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
St Jude Medical N/A N/A N/A $2.28 35.45
Smith & Nephew SNATS $4.68 billion 3.40 $1.32 billion N/A N/A

Smith & Nephew SNATS has higher revenue and earnings than St Jude Medical.

Dividends

St Jude Medical pays an annual dividend of $1.24 per share and has a dividend yield of 1.5%. Smith & Nephew SNATS pays an annual dividend of $0.61 per share and has a dividend yield of 1.7%. St Jude Medical pays out 54.4% of its earnings in the form of a dividend. St Jude Medical has increased its dividend for 4 consecutive years and Smith & Nephew SNATS has increased its dividend for 6 consecutive years. Smith & Nephew SNATS is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares St Jude Medical and Smith & Nephew SNATS’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
St Jude Medical 14.14% 19.40% 6.75%
Smith & Nephew SNATS N/A N/A N/A

Summary

St Jude Medical beats Smith & Nephew SNATS on 7 of the 12 factors compared between the two stocks.

About St Jude Medical

St. Jude Medical, Inc. is focused on the development, manufacture and distribution of cardiovascular medical devices for the global cardiac rhythm management, cardiovascular and atrial fibrillation therapy areas, and interventional pain therapy and neurostimulation devices for the management of chronic pain and movement disorders. The Company’s product categories include tachycardia implantable cardioverter defibrillator systems; atrial fibrillation products (electrophysiology introducers and catheters, advanced cardiac mapping, navigation and recording systems and ablation systems); bradycardia pacemaker systems; vascular products (vascular closure products, pressure measurement guidewires, optical coherence tomography imaging products, vascular plugs, heart failure monitoring devices and other vascular accessories); structural heart products (heart valve replacement and repair products and structural heart defect devices); neuromodulation products, and Thoratec products.

About Smith & Nephew SNATS

Smith & Nephew plc is a medical technology company. The Company is engaged in developing, manufacturing, marketing and selling medical devices and services. Its products and services include Sports Medicine Joint Repair, Arthroscopic Enabling Technologies (AET), Trauma & Extremities, Other Surgical Businesses, Knee Implants, Hip Implants, Advanced Wound Care, Advanced Wound Bioactives and Advanced Wound Devices. The Sports Medicine Joint Repair franchise offers surgeons a range of instruments, technologies and implants necessary to perform minimally invasive surgery of the joints, including the repair of soft tissue injuries and degenerative conditions of the knee, hip and shoulder. The AET franchise offers an array of minimally invasive surgery-enabling systems and devices. The Trauma & Extremities franchise supports healthcare professionals with solutions used by surgeons to stabilize severe fractures, correct bone deformities, treat arthritis and heal soft tissue complications.

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