Natus Medical (NASDAQ:BABY) and Trimedyne (OTCMKTS:TMED) are both small-cap medical companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, valuation, earnings, risk, dividends, profitability and analyst recommendations.

Institutional and Insider Ownership

96.9% of Natus Medical shares are held by institutional investors. 5.5% of Natus Medical shares are held by insiders. Comparatively, 11.1% of Trimedyne shares are held 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.

Analyst Recommendations

This is a summary of current ratings for Natus Medical and Trimedyne, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Natus Medical 0 1 2 0 2.67
Trimedyne 0 0 0 0 N/A

Natus Medical currently has a consensus target price of $44.00, suggesting a potential upside of 26.07%. Given Natus Medical’s higher possible upside, equities analysts clearly believe Natus Medical is more favorable than Trimedyne.

Profitability

This table compares Natus Medical and Trimedyne’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Natus Medical -4.16% 11.18% 6.77%
Trimedyne N/A N/A N/A

Volatility and Risk

Natus Medical has a beta of 0.6, meaning that its share price is 40% less volatile than the S&P 500. Comparatively, Trimedyne has a beta of -1.24, meaning that its share price is 224% less volatile than the S&P 500.

Valuation & Earnings

This table compares Natus Medical and Trimedyne’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Natus Medical $500.97 million 2.33 -$20.29 million $1.45 24.07
Trimedyne $4.70 million 0.18 -$40,000.00 N/A N/A

Trimedyne has lower revenue, but higher earnings than Natus Medical.

Summary

Natus Medical beats Trimedyne on 8 of the 11 factors compared between the two stocks.

Natus Medical Company Profile

Natus Medical Incorporated provides newborn care, neurology, and hearing and balance assessment healthcare products and services worldwide. It offers products and services used for the screening, diagnosis, detection, treatment, monitoring, and tracking of common medical ailments in newborn care, hearing impairment, neurological dysfunction, epilepsy, sleep disorders, neuromuscular diseases, and balance and mobility disorders. The company provides computerized neurodiagnostic systems for audiology, neurology, polysomnography, and neonatology; and software systems for managing and tracking disorders and diseases for public health laboratories. It offers diagnostic electroencephalography (EEG), ambulatory EEG, and long term monitoring, intensive care unit monitoring, electromyography, sleep analysis or polysomnography, intra-operative monitoring, and diagnostic and monitoring transcranial doppler ultrasound technology systems. The company also provides hearing screening products to screen the hearing; diagnostic hearing assessment products to screen for or diagnose hearing loss, or to identify abnormalities affecting the peripheral and central auditory nervous systems; balance and mobility systems to diagnose and assist in treating balance disorders; and thermoregulation products to control the incubators and warmers. In addition, it offers jaundice management products to treat jaundice; brain injury products to diagnose the severity of brain injury; NICVIEW, a live streaming video for families with babies in the neonatal intensive care unit (NICU); and essential products used in the everyday operation of NICU. Further, the company provides computer-based audiological, otoneurologic, and vestibular instrumentation and sound rooms to hearing and balance care professionals. It serves hospitals, clinics, laboratories, physicians, nurses, audiologists, and governmental agencies. Natus Medical Incorporated was founded in 1987 and is headquartered in Pleasanton, California.

Trimedyne Company Profile

Trimedyne, Inc. manufactures and sells lasers, and disposable and reusable fiber-optic laser devices for use in the medical field. It offers lasers, fibers, needles, and switch tips for use in orthopedics, urology, ear and nose surgery, throat surgery, gynecology, gastrointestinal surgery, general surgery, and other medical specialties. The company also provides 80 watt and 30 watt holmium lasers, and side firing laser needles to treat herniated or ruptured spinal discs. In addition, it engages in the provision of services, and rental of lasers and other medical equipment to hospitals and surgery centers on a fee-per-case basis. The company operates in Asia, Europe, Latin America, the Middle East, Australia, and internationally. It markets its products through commission sales representatives in the United States and independent distributors internationally. Trimedyne, Inc. was founded in 1980 and is based in Irvine, California.

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