Analyzing TearLab (TEAR) & Cooper Companies (COO)

TearLab (OTCMKTS: TEAR) and Cooper Companies (NYSE:COO) are both medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, profitability and dividends.

Dividends

Cooper Companies pays an annual dividend of $0.06 per share and has a dividend yield of 0.0%. TearLab does not pay a dividend. Cooper Companies pays out 0.9% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares TearLab and Cooper Companies’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
TearLab $28.01 million 0.13 -$19.92 million ($2.98) -0.21
Cooper Companies $1.97 billion 5.93 $273.91 million $6.97 34.16

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

Profitability

This table compares TearLab and Cooper Companies’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
TearLab -60.22% N/A -75.54%
Cooper Companies 16.45% 16.00% 9.90%

Risk and Volatility

TearLab has a beta of 2.74, meaning that its stock price is 174% more volatile than the S&P 500. Comparatively, Cooper Companies has a beta of 0.54, meaning that its stock price is 46% less volatile than the S&P 500.

Institutional and Insider Ownership

12.2% of TearLab shares are owned by institutional investors. Comparatively, 96.8% of Cooper Companies shares are owned by institutional investors. 12.0% of TearLab shares are owned by insiders. Comparatively, 1.6% of Cooper Companies shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a summary of recent recommendations for TearLab and Cooper Companies, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
TearLab 0 0 4 0 3.00
Cooper Companies 0 5 7 0 2.58

TearLab presently has a consensus price target of $5.75, indicating a potential upside of 812.41%. Cooper Companies has a consensus price target of $260.63, indicating a potential upside of 9.46%. Given TearLab’s stronger consensus rating and higher probable upside, equities analysts clearly believe TearLab is more favorable than Cooper Companies.

Summary

Cooper Companies beats TearLab on 10 of the 15 factors compared between the two stocks.

About TearLab

TearLab Corporation is an in-vitro diagnostic company. The Company has commercialized a tear testing platform, the TearLab Osmolarity System, which enables eye care practitioners to test for sensitive and specific biomarkers using nanoliters of tear film at the point-of-care. The Company, through its subsidiary TearLab Research, Inc., develops technologies to enable eye care practitioners to test a range of biomarkers (chemistries, metabolites, genes and proteins) at the point-of-care. Its product, the TearLab Osmolarity System, enables the measurement of tear osmolarity in the doctor’s office. The TearLab Osmolarity System consists of approximately three components: the TearLab disposable, the TearLab Pen, and the TearLab Reader. The TearLab disposable is a single-use microfluidic microchip. The TearLab Pen is a hand-held device that interfaces with the TearLab disposable. The TearLab Reader is a small desktop unit that allows for the docking of the TearLab Pen.

About Cooper Companies

The Cooper Companies, Inc. is a global medical device company. The Company operates through two business units: CooperVision, Inc. and CooperSurgical, Inc. CooperVision offers soft contact lenses for the vision correction market. CooperVision develops, manufactures and markets a range of single-use, two-week and monthly contact lenses. CooperVision services three primary regions: the Americas; Europe, the Middle East and Africa (EMEA), and Asia Pacific. CooperVision offers spherical, aspherical, toric, multifocal and toric multifocal lens products in various modalities. CooperVision’s products are primarily manufactured at its facilities located in the United Kingdom, Puerto Rico, Hungary, Costa Rica and New York. CooperSurgical offers an array of products and services focused on advancing the health of families through a portfolio of products and services focusing on women’s health, fertility and diagnostics.

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