Hill-Rom (NYSE: HRC) and Cardiovascular Systems (NASDAQ:CSII) are both healthcare companies, but which is the better business? We will compare the two companies based on the strength of their valuation, risk, analyst recommendations, profitability, institutional ownership, dividends and earnings.

Profitability

This table compares Hill-Rom and Cardiovascular Systems’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hill-Rom 4.87% 20.27% 5.87%
Cardiovascular Systems -0.93% 0.74% 0.47%

Institutional & Insider Ownership

82.3% of Hill-Rom shares are owned by institutional investors. Comparatively, 74.9% of Cardiovascular Systems shares are owned by institutional investors. 2.2% of Hill-Rom shares are owned by insiders. Comparatively, 3.3% of Cardiovascular Systems shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk and Volatility

Hill-Rom has a beta of 1.19, indicating that its stock price is 19% more volatile than the S&P 500. Comparatively, Cardiovascular Systems has a beta of 2.52, indicating that its stock price is 152% more volatile than the S&P 500.

Dividends

Hill-Rom pays an annual dividend of $0.72 per share and has a dividend yield of 0.8%. Cardiovascular Systems does not pay a dividend. Hill-Rom pays out 36.2% of its earnings in the form of a dividend. Hill-Rom has increased its dividend for 7 consecutive years.

Analyst Ratings

This is a summary of current ratings and recommmendations for Hill-Rom and Cardiovascular Systems, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hill-Rom 0 3 5 0 2.63
Cardiovascular Systems 1 4 1 0 2.00

Hill-Rom presently has a consensus price target of $90.86, suggesting a potential upside of 3.43%. Cardiovascular Systems has a consensus price target of $31.50, suggesting a potential upside of 31.69%. Given Cardiovascular Systems’ higher probable upside, analysts clearly believe Cardiovascular Systems is more favorable than Hill-Rom.

Earnings & Valuation

This table compares Hill-Rom and Cardiovascular Systems’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hill-Rom $2.74 billion 2.11 $133.60 million $1.99 44.14
Cardiovascular Systems $204.91 million 3.98 -$1.79 million ($0.06) -398.67

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

Summary

Hill-Rom beats Cardiovascular Systems on 12 of the 17 factors compared between the two stocks.

About Hill-Rom

Hill-Rom Holdings, Inc. is a global medical technology company. The Company operates through four segments: North America Patient Support Systems, International Patient Support Systems, Front Line Care and Surgical Solutions. The Company’s products and services include Patient Support Systems, Front Line Care and Surgical Solutions. The Company sells and rents its specialty frames and surfaces, and mobility solutions, as well as its clinical workflow solutions, in the United States and Canada through its North America Patient Support Systems segment, and in regions outside of the United States and Canada through its International Patient Support Systems segment. Its Front Line Care segment globally sells and rents respiratory care products, and sells medical diagnostic equipment and a diversified portfolio of devices that assess, diagnose, treat and manage a range of illnesses and diseases. Under its Surgical Solutions segment, the Company sells its surgical products globally.

About Cardiovascular Systems

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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