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

Risk & Volatility

St Jude Medical has a beta of 1.23, meaning that its share price is 23% more volatile than the S&P 500. Comparatively, Second Sight Medical Products has a beta of 3.61, meaning that its share price is 261% more volatile than the S&P 500.

Valuation & Earnings

This table compares St Jude Medical and Second Sight Medical Products’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
St Jude Medical N/A N/A N/A $2.28 35.45
Second Sight Medical Products $5.14 million 13.15 -$32.85 million ($0.72) -1.65

St Jude Medical has higher revenue, but lower earnings than Second Sight Medical Products. Second Sight Medical Products 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%. Second Sight Medical Products does not pay a dividend. St Jude Medical pays out 54.4% of its earnings in the form of a dividend. Second Sight Medical Products has increased its dividend for 6 consecutive years.

Institutional & Insider Ownership

82.7% of St Jude Medical shares are held by institutional investors. Comparatively, 13.1% of Second Sight Medical Products shares are held by institutional investors. 4.8% of St Jude Medical shares are held by company insiders. Comparatively, 50.9% of Second Sight Medical Products shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares St Jude Medical and Second Sight Medical Products’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
St Jude Medical 14.14% 19.40% 6.75%
Second Sight Medical Products -646.89% -168.49% -129.48%

Analyst Ratings

This is a summary of current ratings and price targets for St Jude Medical and Second Sight Medical Products, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
St Jude Medical 0 1 1 0 2.50
Second Sight Medical Products 0 0 1 0 3.00

St Jude Medical presently has a consensus target price of $84.00, indicating a potential upside of 3.93%. Second Sight Medical Products has a consensus target price of $5.00, indicating a potential upside of 320.17%. Given Second Sight Medical Products’ stronger consensus rating and higher possible upside, analysts plainly believe Second Sight Medical Products is more favorable than St Jude Medical.

Summary

Second Sight Medical Products beats St Jude Medical on 7 of the 13 factors compared between the two stocks.

St Jude Medical Company Profile

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.

Second Sight Medical Products Company Profile

Second Sight Medical Products, Inc. is engaged in developing, manufacturing and marketing prosthetic devices that restore vision to blind individuals. The Company’s product, the Argus II System, treats outer retinal degenerations, such as retinitis pigmentosa (RP). The Argus II System provides an artificial form of vision that differs from the vision of people with normal sight. It does not restore normal vision and it does not slow or reverse the progression of the disease. The Company’s Argus II System employs electrical stimulation to bypass degenerated photoreceptor cells and to stimulate remaining viable retinal cells thereby inducing visual perception in blind individuals. The Argus II System works by converting video images captured by a miniature camera housed in a patient’s glasses into a series of small electrical pulses that are transmitted wirelessly to an array of electrodes that are implanted on the surface of the retina.

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