GE HealthCare Technologies (NASDAQ:GEHC) and STERIS (NYSE:STE) Financial Comparison

GE HealthCare Technologies (NASDAQ:GEHC) and STERIS (NYSE:STE) are both large-cap healthcare companies, but which is the superior stock? We will contrast the two businesses based on the strength of their risk, profitability, institutional ownership, valuation, earnings, analyst recommendations and dividends.

Institutional & Insider Ownership

82.1% of GE HealthCare Technologies shares are owned by institutional investors. Comparatively, 94.7% of STERIS shares are owned by institutional investors. 0.4% of GE HealthCare Technologies shares are owned by insiders. Comparatively, 1.1% of STERIS shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Profitability

This table compares GE HealthCare Technologies and STERIS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
GE HealthCare Technologies	9.33%	20.12%	5.74%
STERIS	13.34%	14.34%	9.66%

Risk and Volatility

GE HealthCare Technologies has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500. Comparatively, STERIS has a beta of 0.92, suggesting that its stock price is 8% less volatile than the S&P 500.

Valuation and Earnings

This table compares GE HealthCare Technologies and STERIS”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
GE HealthCare Technologies	$21.27 billion	1.52	$2.08 billion	$4.36	16.39
STERIS	$6.04 billion	3.75	$782.30 million	$8.18	28.39

GE HealthCare Technologies has higher revenue and earnings than STERIS. GE HealthCare Technologies is trading at a lower price-to-earnings ratio than STERIS, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current recommendations for GE HealthCare Technologies and STERIS, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
GE HealthCare Technologies	0	11	11	1	2.57
STERIS	0	1	3	0	2.75

GE HealthCare Technologies currently has a consensus target price of $78.35, indicating a potential upside of 9.65%. STERIS has a consensus target price of $271.33, indicating a potential upside of 16.82%. Given STERIS’s stronger consensus rating and higher possible upside, analysts plainly believe STERIS is more favorable than GE HealthCare Technologies.

Dividends

GE HealthCare Technologies pays an annual dividend of $0.16 per share and has a dividend yield of 0.2%. STERIS pays an annual dividend of $2.76 per share and has a dividend yield of 1.2%. GE HealthCare Technologies pays out 3.7% of its earnings in the form of a dividend. STERIS pays out 33.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. GE HealthCare Technologies has increased its dividend for 1 consecutive years and STERIS has increased its dividend for 20 consecutive years. STERIS is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

STERIS beats GE HealthCare Technologies on 12 of the 18 factors compared between the two stocks.

About GE HealthCare Technologies

GE HealthCare Technologies Inc. engages in the development, manufacture, and marketing of products, services, and complementary digital solutions used in the diagnosis, treatment, and monitoring of patients in the United States, Canada, and internationally. The company operates through four segments: Imaging, Ultrasound, Patient Care Solutions, and Pharmaceutical Diagnostics. The Imaging segment offers molecular imaging, computed tomography (CT) scanning, magnetic resonance (MR) imaging, image-guided therapy, X-ray systems, and women’s health products. The Ultrasound segment provides medical devices and solutions for screening, diagnosis, treatment, and monitoring of certain diseases in clinical areas, such as radiology and primary care, women’s health, cardiovascular, and point of care and handheld ultrasound solutions, as well as surgical visualization and guidance products. The Patient Care Solutions segment provides medical devices, consumables, services, and digital solutions. Its portfolio includes patient monitoring solutions, anesthesia delivery and respiratory care products, electrocardiogram solutions, maternal infant care products, and consumables and services. The Pharmaceutical Diagnostics supplies diagnostic agents, including CT, angiography and X-ray, MR, single-photon emission computed tomography, positron emission tomography, and ultrasound to the radiology and nuclear medicine industry. The segment also provides contrast media pharmaceuticals that are administered to a patient prior to certain diagnostic scans to increase the visibility of tissues or structures during imaging exams; and molecular imaging agents or radiopharmaceuticals, which are molecular tracers labeled with radioisotopes. It has an AI collaboration with Mass General Brigham. The company was formerly known as GE Healthcare Holding LLC and changed its name to GE HealthCare Technologies Inc. in December 2022. The company was incorporated in 2022 and is headquartered in Chicago, Illinois.

About STERIS

STERIS plc provides infection prevention products and services worldwide. It operates through four segments: Healthcare, Applied Sterilization Technologies, Life Sciences, and Dental. The Healthcare segment offers cleaning chemistries and sterility assurance products; automated endoscope reprocessing system and tracking products; endoscopy accessories, washers, sterilizers, and other pieces of capital equipment for the operation of a sterile processing department; and equipment used directly in the operating room, including surgical tables, lights, and connectivity solutions, as well as equipment management services. It also provides capital equipment installation, maintenance, upgradation, repair, and troubleshooting services; preventive maintenance programs and repair services; instrument and endoscope repair and maintenance services; and custom process improvement consulting and outsourced instrument sterile processing services. The Applied Sterilization Technologies segment provides contract sterilization and testing services for medical device and pharmaceutical manufacturers through a network of approximately 50 contract sterilization and laboratory facilities. The Life Sciences segment designs, manufactures and sells consumable products, such as formulated cleaning chemistries, barrier, sterility assurance products, steam and vaporized hydrogen peroxide sterilizers, and washer disinfectors. This segment also offers equipment installation, maintenance, upgradation, repair, and troubleshooting services; and preventive maintenance programs and repair services. The Dental segment provides hand and electric-powered dental instruments, infection control products, conscious sedation, personal protective equipment, and water quality products for dental suite. The company serves its products and services to hospitals, other healthcare providers, and pharmaceutical manufacturers. The company was founded in 1985 and is based in Dublin, Ireland.