Varian Medical Systems (NYSE: VAR) and Cynosure (NASDAQ:CYNO) are both medical companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, risk, analyst recommendations, institutional ownership, valuation and earnings.

Profitability

This table compares Varian Medical Systems and Cynosure’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Varian Medical Systems 8.85% 23.68% 10.74%
Cynosure 0.70% 0.75% 0.59%

Insider and Institutional Ownership

99.1% of Varian Medical Systems shares are owned by institutional investors. 0.9% of Varian Medical Systems shares are owned by insiders. Comparatively, 2.9% of Cynosure shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Varian Medical Systems and Cynosure, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Varian Medical Systems 2 7 1 0 1.90
Cynosure 0 3 1 0 2.25

Varian Medical Systems currently has a consensus price target of $98.39, suggesting a potential downside of 12.38%. Cynosure has a consensus price target of $58.00, suggesting a potential downside of 12.32%. Given Cynosure’s stronger consensus rating and higher probable upside, analysts clearly believe Cynosure is more favorable than Varian Medical Systems.

Valuation and Earnings

This table compares Varian Medical Systems and Cynosure’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Varian Medical Systems $2.67 billion 3.86 $249.60 million $2.69 41.74
Cynosure N/A N/A N/A $0.60 110.25

Varian Medical Systems has higher revenue and earnings than Cynosure. Varian Medical Systems is trading at a lower price-to-earnings ratio than Cynosure, indicating that it is currently the more affordable of the two stocks.

Summary

Varian Medical Systems beats Cynosure on 6 of the 10 factors compared between the two stocks.

Varian Medical Systems Company Profile

Varian Medical Systems, Inc. is a manufacturer of medical devices and software for treating cancer and other medical conditions with radiotherapy, radiosurgery, proton therapy and brachytherapy medical devices and software for treating cancer and other medical conditions with radiotherapy, radiosurgery, proton therapy and brachytherapy. The Company also has Varian Particle Therapy (VPT) and the operations of the Ginzton Technology Center (GTC). Its VPT business develops, designs, manufactures, sells and services products and systems for delivering proton therapy, another form of external beam radiotherapy using proton beams for the treatment of cancer. Its ProBeam system is capable of delivering intensity modulated proton therapy (IMPT) using pencil beam scanning technology. Its ProBeam Compact is a single room proton therapy product.

Cynosure Company Profile

Cynosure, Inc. develops, manufactures and markets aesthetic treatment systems that enable plastic surgeons, dermatologists and other medical practitioners to perform non-invasive and minimally invasive procedures to remove hair, treat vascular and benign pigmented lesions, remove multi-colored tattoos, revitalize the skin, reduce fat through laser lipolysis, reduce cellulite, clear nails infected by toe fungus, ablate sweat glands and improve women’s health. The Company also markets radiofrequency (RF), energy-sourced medical devices for surgical applications, such as facial plastic and general surgery, gynecology, ear, nose, and throat procedures, ophthalmology, oral and maxillofacial surgery, podiatry and proctology. The Company sells its products globally under the Cynosure, Palomar, ConBio and Ellman brand names. Its product portfolio includes single energy source systems, as well as workstations that incorporate two or more different types of lasers or light-based technologies.

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