Analyzing Cardinal Health (NYSE:CAH) and Pro-Dex (NASDAQ:PDEX)

Pro-Dex (NASDAQ:PDEX) and Cardinal Health (NYSE:CAH) are both medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, risk, dividends and earnings.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Pro-Dex and Cardinal Health, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pro-Dex	0	1	1	0	2.50
Cardinal Health	0	3	13	0	2.81

Pro-Dex presently has a consensus target price of $56.00, suggesting a potential upside of 45.30%. Cardinal Health has a consensus target price of $209.00, suggesting a potential upside of 1.97%. Given Pro-Dex’s higher possible upside, research analysts clearly believe Pro-Dex is more favorable than Cardinal Health.

Profitability

This table compares Pro-Dex and Cardinal Health’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pro-Dex	15.94%	23.64%	13.73%
Cardinal Health	0.68%	-84.37%	4.19%

Institutional and Insider Ownership

15.3% of Pro-Dex shares are owned by institutional investors. Comparatively, 87.2% of Cardinal Health shares are owned by institutional investors. 45.9% of Pro-Dex shares are owned by company insiders. Comparatively, 0.1% of Cardinal Health shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

Pro-Dex has a beta of -0.05, suggesting that its stock price is 105% less volatile than the S&P 500. Comparatively, Cardinal Health has a beta of 0.63, suggesting that its stock price is 37% less volatile than the S&P 500.

Earnings & Valuation

This table compares Pro-Dex and Cardinal Health”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pro-Dex	$66.59 million	1.89	$8.98 million	$3.35	11.50
Cardinal Health	$234.31 billion	0.21	$1.56 billion	$6.63	30.92

Cardinal Health has higher revenue and earnings than Pro-Dex. Pro-Dex is trading at a lower price-to-earnings ratio than Cardinal Health, indicating that it is currently the more affordable of the two stocks.

Summary

Cardinal Health beats Pro-Dex on 8 of the 14 factors compared between the two stocks.

About Pro-Dex

Pro-Dex, Inc. designs, develops, manufactures, and sells powered surgical instruments for medical device original equipment manufacturers worldwide. The company offers autoclavable, battery-powered and electric, and multi-function surgical drivers and shavers that are primarily used in the orthopedic, thoracic, and craniomaxillofacial markets. It also provides engineering, quality, and regulatory consulting services; and manufactures and sells rotary air motors to various industries. The company's products are used in hospitals, medical engineering labs, scientific research facilities, and high-tech manufacturing operations. Pro-Dex, Inc. was founded in 1978 and is headquartered in Irvine, California.

About Cardinal Health

Cardinal Health, Inc. operates as a healthcare services and products company in the United States, Canada, Europe, Asia, and internationally. It provides customized solutions for hospitals, healthcare systems, pharmacies, ambulatory surgery centers, clinical laboratories, physician offices, and patients in the home. The company operates in two segments, Pharmaceutical and Medical. The Pharmaceutical segment distributes branded and generic pharmaceutical, specialty pharmaceutical, and over-the-counter healthcare and consumer products. The segment also provides services to pharmaceutical manufacturers and healthcare providers for specialty pharmaceutical products; operates nuclear pharmacies and radiopharmaceutical manufacturing facilities; repackages generic pharmaceuticals and over-the-counter healthcare products; and provides pharmacy management services to hospitals. The Medical segment manufactures, sources, and distributes Cardinal Health branded medical, surgical, and laboratory products and devices that include exam and surgical gloves; needles, syringe, and sharps disposals; compressions; incontinences; nutritional delivery products; wound care products; single-use surgical drapes, gowns, and apparels; fluid suction and collection systems; urology products; operating room supply products; and electrode product lines. The segment also distributes a range of national brand products, including medical, surgical, and laboratory products; provides supply chain services and solutions to hospitals, ambulatory surgery centers, clinical laboratories, and other healthcare providers; and assembles and sells sterile, and non-sterile procedure kits. The company was incorporated in 1979 and is headquartered in Dublin, Ohio.