HeartWare International (NASDAQ: HTWR) and St Jude Medical (NYSE:STJ) are both healthcare companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, dividends, profitability, institutional ownership, analyst recommendations, risk and valuation.

Insider & Institutional Ownership

82.7% of St Jude Medical shares are held by institutional investors. 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 stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of current ratings and price targets for HeartWare International and St Jude Medical, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
HeartWare International 0 0 0 0 N/A
St Jude Medical 0 0 0 0 N/A

Earnings and Valuation

This table compares HeartWare International and St Jude Medical’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
HeartWare International N/A N/A N/A ($3.40) -17.05
St Jude Medical N/A N/A N/A $2.28 35.45

HeartWare International 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.

Dividends

St Jude Medical pays an annual dividend of $1.24 per share and has a dividend yield of 1.5%. HeartWare International 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.

Profitability

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

Net Margins Return on Equity Return on Assets
HeartWare International -15.84% -25.32% -10.14%
St Jude Medical 14.14% 19.40% 6.75%

Summary

St Jude Medical beats HeartWare International on 8 of the 9 factors compared between the two stocks.

About HeartWare International

Heartware International, Inc. is a medical device company. The Company develops and manufactures miniaturized implantable heart pumps or ventricular assist devices to treat patients suffering from advanced heart failure. The Company operates in the segment of design and manufacture of medical devices. The HeartWare Ventricular Assist System (HVAD System), which includes a ventricular assist device (VAD) or blood pump, patient accessories and surgical tools, provides circulatory support for patients in the advanced stage of heart failure. The HVAD System is designed to be implanted adjacent to the heart, avoiding abdominal surgery. The HVAD System features the centrifugal pump designed to be implanted in the chest, directly adjacent to the heart. It develops MVAD System, a miniaturized device. The CircuLite Surgical System is designed to be implanted through a right, mini-thoracotomy procedure and does not require a sternotomy or cardiopulmonary bypass.

About St Jude Medical

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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