Cerus Corporation (NASDAQ: CERS) and St Jude Medical (NYSE:STJ) are both medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, profitability, earnings, dividends, risk and institutional ownership.

Volatility & Risk

Cerus Corporation has a beta of 1.81, indicating that its share price is 81% more volatile than the S&P 500. Comparatively, St Jude Medical has a beta of 1.23, indicating that its share price is 23% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current recommendations and price targets for Cerus Corporation and St Jude Medical, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cerus Corporation 0 0 4 0 3.00
St Jude Medical 0 1 1 0 2.50

Cerus Corporation presently has a consensus target price of $7.25, suggesting a potential upside of 149.14%. St Jude Medical has a consensus target price of $84.00, suggesting a potential upside of 3.93%. Given Cerus Corporation’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Cerus Corporation is more favorable than St Jude Medical.

Dividends

St Jude Medical pays an annual dividend of $1.24 per share and has a dividend yield of 1.5%. Cerus Corporation does not pay a dividend. St Jude Medical pays out 54.4% of its earnings in the form of a dividend. St Jude Medical has raised its dividend for 6 consecutive years.

Earnings and Valuation

This table compares Cerus Corporation and St Jude Medical’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cerus Corporation $36.83 million 8.62 -$61.75 million ($0.61) -4.77
St Jude Medical N/A N/A N/A $2.28 35.45

St Jude Medical has higher revenue, but lower earnings than Cerus Corporation. Cerus Corporation is trading at a lower price-to-earnings ratio than St Jude Medical, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Cerus Corporation and St Jude Medical’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cerus Corporation -164.39% -120.31% -65.38%
St Jude Medical 14.14% 19.40% 6.75%

Institutional & Insider Ownership

58.3% of Cerus Corporation shares are held by institutional investors. Comparatively, 82.7% of St Jude Medical shares are held by institutional investors. 7.4% of Cerus Corporation shares are held by company insiders. Comparatively, 4.8% of St Jude Medical shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Cerus Corporation Company Profile

Cerus Corporation is a biomedical products company. The Company is engaged in developing and commercializing the INTERCEPT Blood System for blood safety. The Company operates through blood safety segment. The Company’s INTERCEPT Blood System is based on its technology for controlling biological replication, and is designed to reduce blood-borne pathogens in donated blood components intended for transfusion. The Company’s INTERCEPT Blood System is designed to target and inactivate blood-borne pathogens, such as viruses, including human immunodeficiency virus (HIV), West Nile, Severe acute respiratory syndrome (SARS), hepatitis B and C; bacteria and parasites, as well as harmful white blood cells, while preserving the therapeutic properties of platelet, plasma and red blood cell transfusion products. The Company’s INTERCEPT Blood System is for use with blood components, including plasma, platelets, and red blood cells.

St Jude Medical Company Profile

St. Jude Medical, Inc. is focused on the development, manufacture and distribution of cardiovascular medical devices for the global cardiac rhythm management, cardiovascular and atrial fibrillation therapy areas, and interventional pain therapy and neurostimulation devices for the management of chronic pain and movement disorders. The Company’s product categories include tachycardia implantable cardioverter defibrillator systems; atrial fibrillation products (electrophysiology introducers and catheters, advanced cardiac mapping, navigation and recording systems and ablation systems); bradycardia pacemaker systems; vascular products (vascular closure products, pressure measurement guidewires, optical coherence tomography imaging products, vascular plugs, heart failure monitoring devices and other vascular accessories); structural heart products (heart valve replacement and repair products and structural heart defect devices); neuromodulation products, and Thoratec products.

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