SurModics (NASDAQ: SRDX) and Cardiovascular Systems (NASDAQ:CSII) are both small-cap medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, dividends, profitability, institutional ownership and valuation.

Insider & Institutional Ownership

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84.2% of SurModics shares are owned by institutional investors. Comparatively, 82.6% of Cardiovascular Systems shares are owned by institutional investors. 7.7% of SurModics shares are owned by company insiders. Comparatively, 3.3% of Cardiovascular Systems shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility and Risk

SurModics has a beta of 0.75, indicating that its stock price is 25% less volatile than the S&P 500. Comparatively, Cardiovascular Systems has a beta of 2.26, indicating that its stock price is 126% more volatile than the S&P 500.

Profitability

This table compares SurModics and Cardiovascular Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
SurModics 0.10% 5.04% 4.16%
Cardiovascular Systems -1.62% -0.50% -0.31%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for SurModics and Cardiovascular Systems, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
SurModics 0 0 5 0 3.00
Cardiovascular Systems 1 4 1 0 2.00

SurModics currently has a consensus target price of $40.00, indicating a potential upside of 7.24%. Cardiovascular Systems has a consensus target price of $26.50, indicating a potential upside of 14.37%. Given Cardiovascular Systems’ higher possible upside, analysts plainly believe Cardiovascular Systems is more favorable than SurModics.

Valuation & Earnings

This table compares SurModics and Cardiovascular Systems’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
SurModics $73.11 million 6.73 $3.92 million N/A N/A
Cardiovascular Systems $204.91 million 3.76 -$1.79 million ($0.10) -231.68

SurModics has higher earnings, but lower revenue than Cardiovascular Systems.

Summary

SurModics beats Cardiovascular Systems on 10 of the 13 factors compared between the two stocks.

SurModics Company Profile

Surmodics, Inc., together with its subsidiaries, provides medical devices and in vitro diagnostic technologies to the healthcare industry in the United States and Ireland. It operates through two segments, Medical Device and In Vitro Diagnostics. The Medical Device segment offers surface modification coating technologies to enhance access, deliverability, and predictable deployment of medical devices, as well as drug delivery coating technologies to provide site-specific drug delivery from the surface of a medical device for the coronary, peripheral, neuro-vascular, urology, and other markets. The Vitro Diagnostics segment provides stabilization products, substrates, antigens, and surface coatings to diagnostics customers; and manufactures or sells components for in vitro diagnostic immunoassay and molecular tests, as well as surface coatings to the diagnostic, biomedical research, and life science markets. SurModics, Inc. was founded in 1979 and is headquartered in Eden Prairie, Minnesota.

Cardiovascular Systems Company Profile

Cardiovascular Systems, Inc. is a medical technology company. The Company is engaged in treating patients suffering from peripheral and coronary artery diseases, including those with arterial calcium. The Company develops an orbital atherectomy technology for both peripheral and coronary commercial applications. Its peripheral artery disease (PAD) systems are catheter-based platforms capable of treating a range of plaque types in leg arteries both above and below the knee. Its products include Diamondback 360 Peripheral Orbital Atherectomy System (OAS) (Diamondback 360 Peripheral), the Stealth 360 OAS (Stealth 360), Diamondback 360 Peripheral, Diamondback 360 60cm Peripheral, Diamondback 360 Low Profile Peripheral, Diamondback 360 1.50 Peripheral and Diamondback 360 2.00 Peripheral. The Company’s coronary arterial disease (CAD) product, Diamondback 360 Coronary OAS (Coronary OAS), is marketed as a treatment for severely calcified coronary arteries.

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