Cerus Corporation (NASDAQ: CERS) and Stryker Corporation (NYSE:SYK) are both medical companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, dividends, profitability, earnings, institutional ownership and valuation.

Volatility & Risk

Cerus Corporation has a beta of 1.79, suggesting that its stock price is 79% more volatile than the S&P 500. Comparatively, Stryker Corporation has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500.

Profitability

This table compares Cerus Corporation and Stryker Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cerus Corporation -164.39% -120.31% -65.38%
Stryker Corporation 14.22% 24.26% 11.36%

Institutional and Insider Ownership

58.3% of Cerus Corporation shares are owned by institutional investors. Comparatively, 74.1% of Stryker Corporation shares are owned by institutional investors. 7.4% of Cerus Corporation shares are owned by company insiders. Comparatively, 7.4% of Stryker Corporation shares are owned by company 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 recent ratings for Cerus Corporation and Stryker Corporation, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cerus Corporation 0 0 4 0 3.00
Stryker Corporation 2 7 11 0 2.45

Cerus Corporation currently has a consensus target price of $7.25, suggesting a potential upside of 177.78%. Stryker Corporation has a consensus target price of $145.31, suggesting a potential upside of 3.30%. Given Cerus Corporation’s stronger consensus rating and higher probable upside, analysts clearly believe Cerus Corporation is more favorable than Stryker Corporation.

Earnings and Valuation

This table compares Cerus Corporation and Stryker Corporation’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cerus Corporation $36.83 million 7.73 -$61.75 million ($0.61) -4.28
Stryker Corporation $11.96 billion 4.40 $3.29 billion $4.48 31.40

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

Dividends

Stryker Corporation pays an annual dividend of $1.70 per share and has a dividend yield of 1.2%. Cerus Corporation does not pay a dividend. Stryker Corporation pays out 37.9% of its earnings in the form of a dividend. Stryker Corporation has increased its dividend for 6 consecutive years.

Summary

Stryker Corporation beats Cerus Corporation on 10 of the 15 factors compared between the two stocks.

About Cerus Corporation

Cerus Corporation is a biomedical products company. The Company is engaged in developing and commercializing the INTERCEPT Blood System for blood safety. The Company operates through blood safety segment. The Company’s INTERCEPT Blood System is based on its technology for controlling biological replication, and is designed to reduce blood-borne pathogens in donated blood components intended for transfusion. The Company’s INTERCEPT Blood System is designed to target and inactivate blood-borne pathogens, such as viruses, including human immunodeficiency virus (HIV), West Nile, Severe acute respiratory syndrome (SARS), hepatitis B and C; bacteria and parasites, as well as harmful white blood cells, while preserving the therapeutic properties of platelet, plasma and red blood cell transfusion products. The Company’s INTERCEPT Blood System is for use with blood components, including plasma, platelets, and red blood cells.

About Stryker Corporation

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.

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