Comparing Koninklijke Philips (NYSE:PHG) & Medtronic (NYSE:MDT)

Koninklijke Philips (NYSE:PHG) and Medtronic (NYSE:MDT) are both large-cap medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their analyst recommendations, valuation, earnings, profitability, dividends, risk and institutional ownership.

Dividends

Koninklijke Philips pays an annual dividend of $0.82 per share and has a dividend yield of 2.9%. Medtronic pays an annual dividend of $2.84 per share and has a dividend yield of 2.8%. Koninklijke Philips pays out 410.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Medtronic pays out 76.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Medtronic has increased its dividend for 49 consecutive years.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Koninklijke Philips and Medtronic, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Koninklijke Philips	1	3	2	0	2.17
Medtronic	0	11	15	0	2.58

Medtronic has a consensus price target of $110.28, suggesting a potential upside of 7.11%. Given Medtronic’s stronger consensus rating and higher probable upside, analysts plainly believe Medtronic is more favorable than Koninklijke Philips.

Volatility & Risk

Koninklijke Philips has a beta of 0.79, suggesting that its stock price is 21% less volatile than the S&P 500. Comparatively, Medtronic has a beta of 0.71, suggesting that its stock price is 29% less volatile than the S&P 500.

Institutional and Insider Ownership

13.7% of Koninklijke Philips shares are owned by institutional investors. Comparatively, 82.1% of Medtronic shares are owned by institutional investors. 0.3% of Medtronic shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Profitability

This table compares Koninklijke Philips and Medtronic’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Koninklijke Philips	1.07%	12.14%	4.98%
Medtronic	13.71%	14.86%	7.96%

Earnings & Valuation

This table compares Koninklijke Philips and Medtronic”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Koninklijke Philips	$19.50 billion	1.42	-$758.55 million	$0.20	143.35
Medtronic	$33.54 billion	3.94	$4.66 billion	$3.71	27.75

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

Summary

Medtronic beats Koninklijke Philips on 14 of the 17 factors compared between the two stocks.

About Koninklijke Philips

Koninklijke Philips N.V. operates as a health technology company in North America, the Greater China, and internationally. The company operates through Diagnosis & Treatment Businesses, Connected Care Businesses, and Personal Health Businesses segments. It also provides diagnostic imaging solutions, includes magnetic resonance imaging, X-ray systems, and computed tomography (CT) systems and software comprising detector-based spectral CT solutions, as well as molecular and hybrid imaging solutions for nuclear medicine; echography solutions focused on diagnosis, treatment planning and guidance for cardiology, general imaging, obstetrics/gynecology, and point-of-care applications; integrated interventional systems, and interventional diagnostic and therapeutic devices to treat coronary artery and peripheral vascular disease. In addition, the company offers acute patient management solutions; emergency care solutions; sleep and respiratory care solutions; and electronic medical record and care management solutions. Further, it provides power toothbrushes, brush heads, and interdental cleaning and teeth whitening products; infant feeding, baby monitors, and digital parental solutions; and grooming and beauty products and solutions. The company has strategic partnership agreements with TriHealth, Northwell, and Atrium Health. The company was formerly known as Koninklijke Philips Electronics N.V. and changed its name to Koninklijke Philips N.V. in May 2013. Koninklijke Philips N.V. was founded in 1891 and is headquartered in Amsterdam, the Netherlands.

About Medtronic

Medtronic plc develops, manufactures, and sells device-based medical therapies to healthcare systems, physicians, clinicians, and patients worldwide. Its Cardiovascular Portfolio segment offers implantable cardiac pacemakers, cardioverter defibrillators, and cardiac resynchronization therapy devices; cardiac ablation products; insertable cardiac monitor systems; TYRX products; and remote monitoring and patient-centered software. It also provides aortic valves, surgical valve replacement and repair products, endovascular stent grafts and accessories, and transcatheter pulmonary valves; and percutaneous coronary intervention products, percutaneous angioplasty balloons, and products. The company's Medical Surgical Portfolio segment offers surgical stapling devices, vessel sealing instruments, wound closure, electrosurgery products, surgical artificial intelligence and robotic-assisted surgery products, hernia mechanical devices, mesh implants, gynecology and lung products, and various therapies to treat diseases, as well as products in the fields of minimally invasive gastrointestinal and hepatologic diagnostics and therapies, patient monitoring, airway management and ventilation therapies, and renal disease. Its Neuroscience Portfolio segment offers products for spinal surgeons; neurosurgeons; neurologists; pain management specialists; anesthesiologists; orthopedic surgeons; urologists; urogynecologists; interventional radiologists; ear, nose, and throat specialists; and systems that incorporate energy surgical instruments. It also provides image-guided surgery and intra-operative imaging systems and robotic guidance systems used in robot assisted spine procedures; and therapies for vasculature in and around the brain. The company's Diabetes Operating Unit segment offers insulin pumps and consumables, continuous glucose monitoring systems, smart insulin pen systems, and consumables and supplies. The company was founded in 1949 and is headquartered in Dublin, Ireland.