Rockwell Medical (NASDAQ: RMTI) and IRIDEX (NASDAQ:IRIX) are both small-cap medical companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, analyst recommendations, profitability, institutional ownership, valuation and earnings.

Insider & Institutional Ownership

21.2% of Rockwell Medical shares are owned by institutional investors. Comparatively, 48.8% of IRIDEX shares are owned by institutional investors. 18.2% of Rockwell Medical shares are owned by insiders. Comparatively, 4.8% of IRIDEX shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current ratings and target prices for Rockwell Medical and IRIDEX, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rockwell Medical 0 0 0 1 4.00
IRIDEX 0 0 1 0 3.00

Rockwell Medical presently has a consensus target price of $11.00, indicating a potential upside of 151.72%. IRIDEX has a consensus target price of $13.00, indicating a potential upside of 109.68%. Given Rockwell Medical’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Rockwell Medical is more favorable than IRIDEX.

Volatility and Risk

Rockwell Medical has a beta of 2.15, suggesting that its stock price is 115% more volatile than the S&P 500. Comparatively, IRIDEX has a beta of 1.42, suggesting that its stock price is 42% more volatile than the S&P 500.

Earnings and Valuation

This table compares Rockwell Medical and IRIDEX’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Rockwell Medical $57.30 million 3.95 -$25.92 million ($0.51) -8.57
IRIDEX $41.59 million 1.74 -$12.86 million ($1.11) -5.59

IRIDEX has lower revenue, but higher earnings than Rockwell Medical. Rockwell Medical is trading at a lower price-to-earnings ratio than IRIDEX, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Rockwell Medical and IRIDEX’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rockwell Medical -48.06% -76.49% -45.06%
IRIDEX -35.95% -44.78% -34.72%

Summary

Rockwell Medical beats IRIDEX on 8 of the 15 factors compared between the two stocks.

About Rockwell Medical

Rockwell Medical, Inc. operates as an integrated biopharmaceutical company targeting end-stage renal and chronic kidney diseases in the United States and internationally. The company's lead drug includes Triferic, an iron maintenance therapy that replaces the iron lost by patients during hemodialysis treatment. It also provides Calcitriol, a generic active vitamin D injection, which is indicated for the treatment of secondary hyperparathyroidism in dialysis patients. In addition, the company manufactures, sells, delivers, and distributes hemodialysis concentrates, such as CitraPure citric acid concentrate, Dri-Sate dry acid concentrate, RenalPure liquid acid concentrate, dry acid concentrate mixer, Renalpure powder bicarbonate concentrate, and SteriLyte liquid bicarbonate concentrate; and ancillary products, including blood tubings, fistula needles, specialized custom kits, dressings, cleaning agents, filtration salts, and other supplies used by hemodialysis providers. Its concentrated dialysate products are used to maintain human life by removing toxins and replacing critical nutrients in the dialysis patient's bloodstream. Rockwell Medical, Inc. sells its products directly, as well as through independent sales agents and distributors. The company's target customers include senior and operating management of dialysis companies, dialysis service providers, nephrologists, clinic administrators, nurses, medical directors, and technical and purchasing personnel. Rockwell Medical, Inc. was founded in 1995 and is based in Wixom, Michigan.

About IRIDEX

IRIDEX Corporation, an ophthalmic medical technology company, provides therapeutic based laser systems, delivery devices, and consumable instrumentation to treat sight-threatening eye diseases in ophthalmology. The company offers laser consoles, such as Cyclo G6 laser system for use in the treatment of glaucoma; IQ 532 and IQ 577 laser systems, which are used for the treatment of diabetic macular edema and other retinal diseases; and OcuLight TX, OcuLight SL, OcuLight SLx, OcuLight GL, and OcuLight GLx laser systems, which are used to treat proliferative diabetic retinopathy, macular holes, retinal tears, and detachments. It also provides delivery devices, including TxCell scanning laser delivery system that allows the physician to perform multi-spot pattern scanning; and slit lamp adapter, which allows the physician to utilize a standard slit lamp in diagnosis and treatment procedures. In addition, the company offers MicroPulse P3 Probe, which is used with its Cylco G6 laser system that delivers laser to treat glaucoma; G-Probe, which is used in procedures to treat uncontrolled glaucoma; G-Probe Illuminate and G-Probe Illuminate, which are used in procedures to treat refractory glaucoma; and EndoProbe family of products used in vitrectomy procedures. It serves ophthalmologists, research and teaching hospitals, government installations, surgical centers, hospitals, and office clinics. IRIDEX Corporation markets its products through direct and independent sales force in the United States, as well as through independent distributors internationally. The company was formerly known as IRIS Medical Instruments, Inc. and changed its name to IRIDEX Corporation in November 1995. IRIDEX Corporation was founded in 1989 and is headquartered in Mountain View, California.

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