Medtronic PLC (MDT) and AxoGen (NASDAQ:AXGN) Head to Head Review

AxoGen (NASDAQ: AXGN) and Medtronic PLC (NYSE:MDT) are both medical companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, institutional ownership, earnings, risk, analyst recommendations, dividends and valuation.

Dividends

Medtronic PLC pays an annual dividend of $1.84 per share and has a dividend yield of 2.2%. AxoGen does not pay a dividend. Medtronic PLC pays out 63.7% of its earnings in the form of a dividend. Medtronic PLC has increased its dividend for 39 consecutive years.

Insider & Institutional Ownership

64.6% of AxoGen shares are held by institutional investors. Comparatively, 83.5% of Medtronic PLC shares are held by institutional investors. 9.3% of AxoGen shares are held by insiders. Comparatively, 0.3% of Medtronic PLC shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Earnings and Valuation

This table compares AxoGen and Medtronic PLC’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
AxoGen $50.02 million 10.33 -$8.05 million ($0.42) -37.02
Medtronic PLC $29.71 billion 3.82 $9.22 billion $2.89 28.86

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

Analyst Ratings

This is a breakdown of recent ratings and target prices for AxoGen and Medtronic PLC, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AxoGen 0 0 6 0 3.00
Medtronic PLC 0 9 14 0 2.61

AxoGen presently has a consensus price target of $15.90, suggesting a potential upside of 2.25%. Medtronic PLC has a consensus price target of $90.05, suggesting a potential upside of 7.96%. Given Medtronic PLC’s higher possible upside, analysts clearly believe Medtronic PLC is more favorable than AxoGen.

Profitability

This table compares AxoGen and Medtronic PLC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AxoGen -27.50% -114.64% -27.71%
Medtronic PLC 13.56% 12.72% 6.48%

Risk and Volatility

AxoGen has a beta of 0.26, suggesting that its share price is 74% less volatile than the S&P 500. Comparatively, Medtronic PLC has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.

Summary

Medtronic PLC beats AxoGen on 12 of the 16 factors compared between the two stocks.

About AxoGen

AxoGen, Inc. provides surgical solutions for peripheral nerve injuries. The company’s surgical nerve repair solutions include Avance Nerve Graft, an off-the-shelf processed human nerve allograft for bridging severed nerves without the comorbidities associated with a second surgical site; AxoGuard Nerve Connector, a porcine submucosa extracellular matrix (ECM) coaptation aid for tensionless repair of severed nerves; and AxoGuard Nerve Protector, a porcine submucosa ECM product that is used to wrap and protect injured peripheral nerves, as well as reinforces the nerve reconstruction while preventing soft tissue attachments. Its solutions also comprise Avive Soft Tissue Membrane, a minimally processed human umbilical cord membrane that is used as a resorbable soft tissue covering to separate tissues and modulate inflammation in the surgical bed. In addition, the company offers AcroVal neurosensory and motor testing system, which consists of AcroGrip for use in hand grip strength measurement; AcroPinch for measuring pinch strength; and Pressure-Specified Sensory Device, a somatosensory evaluation and measurement device. Further, it provides AxoTouch two point discriminator, a tool that is used for measuring the innervation density of surface area of the skin. The company provides its products to hospitals, surgery centers, and military hospitals in the United States, Canada, the United Kingdom and other European countries, and internationally. AxoGen, Inc. is headquartered in Alachua, Florida.

About Medtronic PLC

Medtronic Public Limited Company (Medtronic) is a medical technology and services company. The Company develops, manufactures and markets its medical devices and technologies to hospitals, physicians, clinicians and patients in approximately 160 countries. The Company operates in four segments: Cardiac and Vascular Group, Minimally Invasive Technologies Group, Restorative Therapies Group and Diabetes Group. The Cardiac and Vascular Group segment includes Cardiac Rhythm & Heart Failure, Coronary & Structural Heart and Aortic & Peripheral Vascula. Its Minimally Invasive Technologies Group segment includes Surgical Solutions and Patient Monitoring and Recovery. Its Restorative Therapies Group segment includes Spine, Neuromodulation, Surgical Technologies and Neurovascular. Its Diabetes Group segment includes Intensive Insulin Management, Non-Intensive Diabetes Therapies and Diabetes Services & Solutions. The Company’s subsidiaries include Medtronic, Inc. and HeartWare International, Inc.

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