Dynatronics (NASDAQ:DYNT) and Arch Therapeutics (OTCMKTS:ARTH) are both small-cap medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their earnings, risk, dividends, profitability, analyst recommendations, institutional ownership and valuation.

Insider & Institutional Ownership

13.0% of Dynatronics shares are held by institutional investors. Comparatively, 0.1% of Arch Therapeutics shares are held by institutional investors. 44.0% of Dynatronics shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Dynatronics and Arch Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dynatronics -2.16% -5.84% -1.41%
Arch Therapeutics N/A -622.59% -168.51%

Analyst Ratings

This is a breakdown of current recommendations and price targets for Dynatronics and Arch Therapeutics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dynatronics 0 0 1 0 3.00
Arch Therapeutics 0 0 3 1 3.25

Dynatronics currently has a consensus price target of $4.00, suggesting a potential upside of 76.21%. Arch Therapeutics has a consensus price target of $3.00, suggesting a potential upside of 710.81%. Given Arch Therapeutics’ stronger consensus rating and higher possible upside, analysts plainly believe Arch Therapeutics is more favorable than Dynatronics.

Earnings and Valuation

This table compares Dynatronics and Arch Therapeutics’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Dynatronics $64.42 million 0.29 -$1.60 million ($0.40) -5.68
Arch Therapeutics N/A N/A -$4.81 million N/A N/A

Dynatronics has higher revenue and earnings than Arch Therapeutics.

Volatility & Risk

Dynatronics has a beta of -0.15, suggesting that its share price is 115% less volatile than the S&P 500. Comparatively, Arch Therapeutics has a beta of -0.2, suggesting that its share price is 120% less volatile than the S&P 500.

Summary

Dynatronics beats Arch Therapeutics on 7 of the 12 factors compared between the two stocks.

About Dynatronics

Dynatronics Corporation designs, manufactures, markets, and distributes orthopedic soft goods, medical supplies, and physical therapy and rehabilitation equipment in the United States and internationally. It offers ankle and wrist braces, hot packs, cold packs, lumbar rolls, cervical collars, slings, cervical pillows, bolsters, positioning wedges, back cushions, lotions and gels, paper products, athletic tape, splints, elastic wraps, exercise weights, exercise bands and tubing, electrodes, and rehabilitation and back products. The company also provides electrotherapy, ultrasound, phototherapy, and thermal therapy modalities; motorized and stationary treatment tables and mat platforms; custom athletic training equipment; and strength and cardio training equipment. In addition, it distributes a range of products, such as exercise equipment, treatment tables, treadmills, walkers, compression therapy devices, stair climbers, parallel bars, laser light therapy equipment, shortwave diathermy, and radial pulse equipment. The company sells its products to licensed practitioners, such as orthopedists, physical therapists, chiropractors, and athletic trainers, professional sports teams and universities, sports medicine specialists, post-acute care facilities, hospitals and clinics, retail distributors and equipment manufacturer partners through direct and independent sales representatives and independent dealers. It also exports its products to approximately 30 countries. The company was founded in 1979 and is headquartered in Cottonwood Heights, Utah.

About Arch Therapeutics

Arch Therapeutics, Inc., together with its subsidiaries, operates as a biotechnology company in the United States. The company develops products based on its technology to stop bleeding and control leaking, as well as manages wounds during surgery, trauma, and interventional care. Its primary product candidate is AC5 Devices, a product containing synthetic biocompatible peptides that comprise naturally occurring amino acids to achieve hemostasis in skin wounds and in minimally invasive and open surgical procedures. The company was founded in 2006 and is based in Framingham, Massachusetts.

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