Thermo Fisher Scientific (NYSE: TMO) and IRIDEX Corporation (NASDAQ:IRIX) are both medical companies, but which is the better business? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, dividends, valuation and institutional ownership.

Profitability

This table compares Thermo Fisher Scientific and IRIDEX Corporation’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Thermo Fisher Scientific 11.80% 15.97% 7.48%
IRIDEX Corporation -37.62% -16.87% -13.86%

Dividends

Thermo Fisher Scientific pays an annual dividend of $0.60 per share and has a dividend yield of 0.3%. IRIDEX Corporation does not pay a dividend. Thermo Fisher Scientific pays out 10.5% of its earnings in the form of a dividend.

Earnings & Valuation

This table compares Thermo Fisher Scientific and IRIDEX Corporation’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Thermo Fisher Scientific $19.20 billion 3.89 $4.81 billion $5.74 33.37
IRIDEX Corporation $42.80 million 2.59 -$5.81 million ($1.51) -6.36

Thermo Fisher Scientific has higher revenue and earnings than IRIDEX Corporation. IRIDEX Corporation is trading at a lower price-to-earnings ratio than Thermo Fisher Scientific, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Thermo Fisher Scientific has a beta of 1.05, indicating that its share price is 5% more volatile than the S&P 500. Comparatively, IRIDEX Corporation has a beta of 1.29, indicating that its share price is 29% more volatile than the S&P 500.

Institutional and Insider Ownership

83.4% of Thermo Fisher Scientific shares are owned by institutional investors. Comparatively, 47.5% of IRIDEX Corporation shares are owned by institutional investors. 0.5% of Thermo Fisher Scientific shares are owned by company insiders. Comparatively, 5.0% of IRIDEX Corporation shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Thermo Fisher Scientific and IRIDEX Corporation, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Thermo Fisher Scientific 0 1 14 0 2.93
IRIDEX Corporation 0 0 1 0 3.00

Thermo Fisher Scientific presently has a consensus price target of $201.46, suggesting a potential upside of 5.18%. IRIDEX Corporation has a consensus price target of $20.00, suggesting a potential upside of 108.33%. Given IRIDEX Corporation’s stronger consensus rating and higher possible upside, analysts clearly believe IRIDEX Corporation is more favorable than Thermo Fisher Scientific.

Summary

Thermo Fisher Scientific beats IRIDEX Corporation on 10 of the 15 factors compared between the two stocks.

About Thermo Fisher Scientific

Thermo Fisher Scientific Inc. develops, manufactures and sells a range of products. The Company provides analytical instruments, equipment, reagents and consumables, software and services for research, manufacturing, analysis, discovery and diagnostics. It operates through four segments: Life Sciences Solutions, Analytical Instruments, Specialty Diagnostics, and Laboratory Products and Services. The Life Sciences Solutions segment provides a portfolio of reagents, instruments and consumables. The Analytical Instruments segment provides a range of instruments, consumables, software and services. The Specialty Diagnostics segment offers a range of diagnostic test kits, reagents, culture media, instruments and associated products. The Laboratory Products and Services segment offers controlled temperature technologies products, growth protection and separation products, and water and laboratory products.

About IRIDEX Corporation

IRIDEX Corporation is a provider of therapeutic based laser consoles, delivery devices and consumable instrumentation used to treat sight-threatening eye diseases in ophthalmology. The Company operates through ophthalmology segment. Its ophthalmology products consist of laser consoles, delivery devices and consumable instrumentation, including laser probes, and are used in the treatment of serious eye diseases, including the over three causes of irreversible blindness, such as diabetic retinopathy, glaucoma and age-related macular degeneration (AMD). In addition, the Company’s ophthalmology products are often used in vitrectomy procedures (used to treat proliferative diabetic retinopathy, macular holes, retinal tears and detachments), which are generally performed in the operating room and require a consumable single use intraocular laser probe (EndoProbe) to deliver light to the back of the eye together with other instrumentation.

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