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

Analyst Ratings

This is a breakdown of recent ratings for Hill-Rom and AtriCure, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hill-Rom 0 2 5 0 2.71
AtriCure 0 1 6 0 2.86

Hill-Rom presently has a consensus price target of $90.33, suggesting a potential upside of 7.17%. AtriCure has a consensus price target of $24.67, suggesting a potential upside of 35.23%. Given AtriCure’s stronger consensus rating and higher possible upside, analysts clearly believe AtriCure is more favorable than Hill-Rom.

Dividends

Hill-Rom pays an annual dividend of $0.72 per share and has a dividend yield of 0.9%. AtriCure does not pay a dividend. Hill-Rom pays out 36.2% of its earnings in the form of a dividend. AtriCure has raised its dividend for 6 consecutive years.

Valuation & Earnings

This table compares Hill-Rom and AtriCure’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Hill-Rom $2.74 billion 2.02 $133.60 million $1.99 42.36
AtriCure $155.11 million 4.05 -$33.33 million ($1.02) -17.88

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

Volatility & Risk

Hill-Rom has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500. Comparatively, AtriCure has a beta of 0.65, meaning that its share price is 35% less volatile than the S&P 500.

Profitability

This table compares Hill-Rom and AtriCure’s 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%
AtriCure -19.40% -20.28% -12.20%

Institutional and Insider Ownership

82.3% of Hill-Rom shares are owned by institutional investors. Comparatively, 86.2% of AtriCure shares are owned by institutional investors. 2.2% of Hill-Rom shares are owned by insiders. Comparatively, 10.0% of AtriCure 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.

Hill-Rom Company Profile

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.

AtriCure Company Profile

AtriCure, Inc. is an atrial fibrillation (Afib) solutions company. The Company develops, manufactures, and sells devices designed primarily for the surgical ablation of cardiac tissue and systems designed for the exclusion of the left atrial appendage. It has various product lines for the ablation of cardiac tissue, including its Isolator Synergy Ablation System, for the treatment of persistent and longstanding persistent forms of Afib in patients undergoing certain open concomitant procedures. It has two primary product lines for cardiac tissue ablation, which include Radio Frequency Ablation Devices and cryoICE Cryoablation System, and a product line for left atrial appendage exclusion. The Company also sells Lumitip dissectors and the Estech line of reusable cardiac surgery (valve) instruments. Its cryoICE cryosurgery product line offers various cryoablation devices. Its AtriClip Left Atrial Appendage Exclusion System is designed to occlude the heart’s left atrial appendage (LAA).

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