Head-To-Head Analysis: Varian Medical Systems (VAR) and ResMed (RMD)
Varian Medical Systems (NYSE: VAR) and ResMed (NYSE:RMD) are both mid-cap medical companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, profitability, analyst recommendations, valuation, risk, dividends and institutional ownership.
Valuation & Earnings
This table compares Varian Medical Systems and ResMed’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Varian Medical Systems||$3.27 billion||2.93||$643.00 million||$3.04||34.28|
|ResMed||$2.07 billion||5.39||$568.89 million||$2.41||32.54|
Varian Medical Systems has higher revenue and earnings than ResMed. ResMed is trading at a lower price-to-earnings ratio than Varian Medical Systems, indicating that it is currently the more affordable of the two stocks.
This table compares Varian Medical Systems and ResMed’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Varian Medical Systems||9.50%||24.70%||11.12%|
Risk & Volatility
Varian Medical Systems has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500. Comparatively, ResMed has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500.
Insider and Institutional Ownership
99.2% of Varian Medical Systems shares are owned by institutional investors. Comparatively, 60.1% of ResMed shares are owned by institutional investors. 0.9% of Varian Medical Systems shares are owned by insiders. Comparatively, 1.8% of ResMed shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.
ResMed pays an annual dividend of $1.40 per share and has a dividend yield of 1.8%. Varian Medical Systems does not pay a dividend. ResMed pays out 58.1% of its earnings in the form of a dividend.
This is a summary of current recommendations for Varian Medical Systems and ResMed, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Varian Medical Systems||2||6||2||0||2.00|
Varian Medical Systems presently has a consensus target price of $94.94, suggesting a potential downside of 8.89%. ResMed has a consensus target price of $64.80, suggesting a potential downside of 17.37%. Given Varian Medical Systems’ stronger consensus rating and higher probable upside, research analysts clearly believe Varian Medical Systems is more favorable than ResMed.
Varian Medical Systems beats ResMed on 9 of the 15 factors compared between the two stocks.
Varian Medical Systems Company Profile
Varian Medical Systems, Inc. is a manufacturer of medical devices and software for treating cancer and other medical conditions with radiotherapy, radiosurgery, proton therapy and brachytherapy medical devices and software for treating cancer and other medical conditions with radiotherapy, radiosurgery, proton therapy and brachytherapy. The Company also has Varian Particle Therapy (VPT) and the operations of the Ginzton Technology Center (GTC). Its VPT business develops, designs, manufactures, sells and services products and systems for delivering proton therapy, another form of external beam radiotherapy using proton beams for the treatment of cancer. Its ProBeam system is capable of delivering intensity modulated proton therapy (IMPT) using pencil beam scanning technology. Its ProBeam Compact is a single room proton therapy product.
ResMed Company Profile
ResMed Inc. is a holding company. The Company is engaged in the development, manufacturing, distribution and marketing of medical devices and cloud-based software applications that diagnose, treat and manage respiratory disorders, including sleep disordered breathing (SDB), chronic obstructive pulmonary disease (COPD), neuromuscular disease and other diseases. SDB includes obstructive sleep apnea (OSA) and other respiratory disorders that occur during sleep. Its cloud-based software digital health applications, along with its devices, are designed to provide connected care to improve patient outcomes. The Company’s portfolio of products includes devices, diagnostic products, mask systems, headgear and other accessories, dental devices, portable oxygen concentrators (POCs) and cloud-based software informatics solutions. The Company produces Continuous Positive Airway Pressure (CPAP), Variable Positive Airway Pressure (VPAP) and AutoSet systems for the titration and treatment of SDB.
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