Medtronic (NYSE:MDT) versus Smith & Nephew SNATS (NYSE:SNN) Financial Comparison

Medtronic (NYSE:MDT) and Smith & Nephew SNATS (NYSE:SNN) are both large-cap medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, dividends, analyst recommendations, profitability, risk, earnings and valuation.

Dividends

Medtronic pays an annual dividend of $2.88 per share and has a dividend yield of 3.6%. Smith & Nephew SNATS pays an annual dividend of $0.93 per share and has a dividend yield of 3.1%. Medtronic pays out 77.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Medtronic has raised its dividend for 49 consecutive years. Medtronic is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Valuation & Earnings

This table compares Medtronic and Smith & Nephew SNATS”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Medtronic	$36.36 billion	2.80	$4.80 billion	$3.73	21.28
Smith & Nephew SNATS	$6.16 billion	2.08	$625.00 million	N/A	N/A

Medtronic has higher revenue and earnings than Smith & Nephew SNATS.

Volatility & Risk

Medtronic has a beta of 0.58, indicating that its stock price is 42% less volatile than the S&P 500. Comparatively, Smith & Nephew SNATS has a beta of 0.55, indicating that its stock price is 45% less volatile than the S&P 500.

Profitability

This table compares Medtronic and Smith & Nephew SNATS’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Medtronic	13.20%	14.61%	7.80%
Smith & Nephew SNATS	N/A	N/A	N/A

Analyst Recommendations

This is a summary of recent ratings for Medtronic and Smith & Nephew SNATS, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Medtronic	0	11	17	0	2.61
Smith & Nephew SNATS	0	5	1	0	2.17

Medtronic presently has a consensus target price of $99.00, suggesting a potential upside of 24.74%. Smith & Nephew SNATS has a consensus target price of $30.93, suggesting a potential upside of 2.72%. Given Medtronic’s stronger consensus rating and higher possible upside, analysts clearly believe Medtronic is more favorable than Smith & Nephew SNATS.

Institutional & Insider Ownership

82.1% of Medtronic shares are held by institutional investors. Comparatively, 25.6% of Smith & Nephew SNATS shares are held by institutional investors. 0.3% of Medtronic shares are held by insiders. Comparatively, 1.0% of Smith & Nephew SNATS shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Summary

Medtronic beats Smith & Nephew SNATS on 13 of the 15 factors compared between the two stocks.

About Medtronic

Medtronic plc develops, manufactures, and sells device-based medical therapies to healthcare systems, physicians, clinicians, and patients worldwide. Its Cardiovascular Portfolio segment offers implantable cardiac pacemakers, cardioverter defibrillators, and cardiac resynchronization therapy devices; cardiac ablation products; insertable cardiac monitor systems; TYRX products; and remote monitoring and patient-centered software. It also provides aortic valves, surgical valve replacement and repair products, endovascular stent grafts and accessories, and transcatheter pulmonary valves; and percutaneous coronary intervention products, percutaneous angioplasty balloons, and products. The company's Medical Surgical Portfolio segment offers surgical stapling devices, vessel sealing instruments, wound closure, electrosurgery products, surgical artificial intelligence and robotic-assisted surgery products, hernia mechanical devices, mesh implants, gynecology and lung products, and various therapies to treat diseases, as well as products in the fields of minimally invasive gastrointestinal and hepatologic diagnostics and therapies, patient monitoring, airway management and ventilation therapies, and renal disease. Its Neuroscience Portfolio segment offers products for spinal surgeons; neurosurgeons; neurologists; pain management specialists; anesthesiologists; orthopedic surgeons; urologists; urogynecologists; interventional radiologists; ear, nose, and throat specialists; and systems that incorporate energy surgical instruments. It also provides image-guided surgery and intra-operative imaging systems and robotic guidance systems used in robot assisted spine procedures; and therapies for vasculature in and around the brain. The company's Diabetes Operating Unit segment offers insulin pumps and consumables, continuous glucose monitoring systems, smart insulin pen systems, and consumables and supplies. The company was founded in 1949 and is headquartered in Dublin, Ireland.

About Smith & Nephew SNATS

Smith & Nephew plc engages in the development, manufacture, marketing, and sale of medical devices. It operates through the following segments: Orthopaedics, Sports Medicine and ENT, and Advanced Wound Management. The Orthopaedics and Sports Medicine and ENT segment consists of the following businesses: knee implants, hip implants, other reconstruction, trauma, sports medicine joint repair, arthroscopic enabling technologies, and ENT. The Advanced Wound Management segment includes advanced wound care, advanced wound bioactives, and advanced wound devices businesses. The company was founded in 1856 and is headquartered in Watford, the United Kingdom.