Terumo (OTCMKTS:TRUMY) versus ResMed (NYSE:RMD) Head-To-Head Survey

Terumo (OTCMKTS:TRUMY) and ResMed (NYSE:RMD) are both large-cap healthcare companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, institutional ownership and profitability.

Dividends

Terumo pays an annual dividend of $0.06 per share and has a dividend yield of 0.4%. ResMed pays an annual dividend of $2.64 per share and has a dividend yield of 1.1%. Terumo pays out 8.5% of its earnings in the form of a dividend. ResMed pays out 24.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. ResMed has raised its dividend for 13 consecutive years. ResMed is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk & Volatility

Terumo has a beta of 0.82, indicating that its stock price is 18% less volatile than the S&P 500. Comparatively, ResMed has a beta of 0.77, indicating that its stock price is 23% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Terumo and ResMed, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Terumo	0	0	0	2	4.00
ResMed	0	11	7	0	2.39

ResMed has a consensus price target of $253.69, suggesting a potential upside of 5.89%. Given ResMed’s higher probable upside, analysts plainly believe ResMed is more favorable than Terumo.

Earnings and Valuation

This table compares Terumo and ResMed”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Terumo	$7.52 billion	2.95	$897.03 million	$0.71	21.16
ResMed	$5.65 billion	5.96	$1.52 billion	$10.98	21.82

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

Insider & Institutional Ownership

55.0% of ResMed shares are held by institutional investors. 0.6% of ResMed shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Terumo and ResMed’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Terumo	13.83%	10.44%	7.34%
ResMed	27.79%	26.42%	19.43%

Summary

ResMed beats Terumo on 13 of the 18 factors compared between the two stocks.

About Terumo

Terumo Corporation is a Japan-based medical technology company that develops and manufactures products for hospitals, clinics and other healthcare providers. Founded in 1921, the company began by producing clinical thermometers and has since expanded into a broad range of medical devices and services. Terumo’s businesses include cardiovascular and vascular products, such as catheter-based devices and systems used in the treatment of heart and vascular conditions; medical care products, including infusion and injection devices; and blood and cell technologies used to collect, process and manage blood and cellular therapies.

About ResMed

ResMed is a medical technology company that develops products and software for people with sleep apnea, chronic obstructive pulmonary disease and other respiratory conditions. Its devices include continuous positive airway pressure (CPAP) and bilevel machines, ventilators and related masks and accessories. The company also provides cloud-connected software for managing sleep and respiratory care, along with digital tools used by home medical equipment providers and post-acute care organizations.