Analyzing CONMED (CNMD) & Hill-Rom (HRC)

Hill-Rom (NYSE: HRC) and CONMED (NASDAQ:CNMD) are both healthcare companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, risk, profitability, dividends, valuation and earnings.

Analyst Recommendations

This is a summary of recent ratings for Hill-Rom and CONMED, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hill-Rom 0 3 5 0 2.63
CONMED 0 3 1 0 2.25

Hill-Rom presently has a consensus target price of $90.86, suggesting a potential upside of 3.43%. CONMED has a consensus target price of $50.67, suggesting a potential downside of 5.07%. Given Hill-Rom’s stronger consensus rating and higher possible upside, analysts plainly believe Hill-Rom is more favorable than CONMED.

Insider & Institutional Ownership

82.3% of Hill-Rom shares are owned by institutional investors. Comparatively, 99.0% of CONMED shares are owned by institutional investors. 2.2% of Hill-Rom shares are owned by company insiders. Comparatively, 2.6% of CONMED shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Hill-Rom and CONMED’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hill-Rom 4.87% 20.27% 5.87%
CONMED 1.99% 8.40% 3.65%

Volatility and Risk

Hill-Rom has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500. Comparatively, CONMED has a beta of 0.66, meaning that its share price is 34% less volatile than the S&P 500.

Dividends

Hill-Rom pays an annual dividend of $0.72 per share and has a dividend yield of 0.8%. CONMED pays an annual dividend of $0.80 per share and has a dividend yield of 1.5%. Hill-Rom pays out 36.2% of its earnings in the form of a dividend. CONMED pays out 145.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Hill-Rom has raised its dividend for 7 consecutive years.

Earnings and Valuation

This table compares Hill-Rom and CONMED’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hill-Rom $2.74 billion 2.11 $133.60 million $1.99 44.14
CONMED $763.52 million 1.95 $14.66 million $0.55 97.04

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

Summary

Hill-Rom beats CONMED on 13 of the 17 factors compared between the two stocks.

About Hill-Rom

Hill-Rom Holdings, Inc. is a global medical technology company. The Company operates through four segments: North America Patient Support Systems, International Patient Support Systems, Front Line Care and Surgical Solutions. The Company’s products and services include Patient Support Systems, Front Line Care and Surgical Solutions. The Company sells and rents its specialty frames and surfaces, and mobility solutions, as well as its clinical workflow solutions, in the United States and Canada through its North America Patient Support Systems segment, and in regions outside of the United States and Canada through its International Patient Support Systems segment. Its Front Line Care segment globally sells and rents respiratory care products, and sells medical diagnostic equipment and a diversified portfolio of devices that assess, diagnose, treat and manage a range of illnesses and diseases. Under its Surgical Solutions segment, the Company sells its surgical products globally.

About CONMED

CONMED Corporation is a medical technology company. The Company is engaged in the development, manufacturing and sale on a global basis of surgical devices and related equipment. The Company provides surgical devices and equipment for minimally invasive procedures. The Company’s products are used by surgeons and physicians in a range of specialties, including orthopedics, general surgery, gynecology, neurosurgery and gastroenterology. The Company’s product lines consist of orthopedic surgery, general surgery and surgical visualization. As of December 31, 2016, the Company’s products are distributed domestically directly to over 6,000 hospitals, surgery centers and other healthcare institutions, as well as through medical specialty distributors. The Company’s orthopedic surgery product lines include sports medicine, powered surgical instruments, and sports biologics and tissue. These products are marketed under a range of brands, including Hall, CONMED Linvatec, Concept and Shutt.

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