Analyzing Varex Imaging (NASDAQ:VREX) and Nuwellis (NASDAQ:NUWE)

Nuwellis (NASDAQ:NUWE) and Varex Imaging (NASDAQ:VREX) are both small-cap healthcare companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, earnings, risk, profitability, dividends, valuation and analyst recommendations.

Analyst Ratings

This is a summary of current ratings and recommmendations for Nuwellis and Varex Imaging, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nuwellis	1	0	0	0	1.00
Varex Imaging	0	7	0	0	2.00

Varex Imaging has a consensus price target of $16.88, indicating a potential downside of 8.71%. Given Varex Imaging’s stronger consensus rating and higher possible upside, analysts clearly believe Varex Imaging is more favorable than Nuwellis.

Profitability

This table compares Nuwellis and Varex Imaging’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Nuwellis	-123.38%	-623.14%	-147.34%
Varex Imaging	2.55%	9.19%	4.13%

Insider & Institutional Ownership

3.1% of Nuwellis shares are owned by institutional investors. 1.6% of Nuwellis shares are owned by insiders. Comparatively, 4.6% of Varex Imaging shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Nuwellis and Varex Imaging”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nuwellis	$8.27 million	0.37	-$17.52 million	($132.59)	-0.01
Varex Imaging	$844.60 million	0.92	-$70.30 million	$0.52	35.55

Nuwellis has higher earnings, but lower revenue than Varex Imaging. Nuwellis is trading at a lower price-to-earnings ratio than Varex Imaging, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Nuwellis has a beta of 0.23, indicating that its share price is 77% less volatile than the S&P 500. Comparatively, Varex Imaging has a beta of 0.96, indicating that its share price is 4% less volatile than the S&P 500.

Summary

Varex Imaging beats Nuwellis on 11 of the 13 factors compared between the two stocks.

About Nuwellis

Nuwellis, Inc., a medical device company, develops, manufactures, and commercializes medical devices used in ultrafiltration therapy. The company offers Aquadex FlexFlow and Aquadex SmartFlow systems, which are used to treat patients suffering from fluid overload due to heart failure. Its Aquadex FlexFlow system includes a console, disposable blood circuit set, and disposable catheter. The company sells its products to hospitals and clinics through its direct salesforce in the United States; and through independent specialty distributors in Austria, Belarus, Brazil, Colombia, the Czech Republic, Germany, Greece, Hong Kong, India, Israel, Italy, Panama, Romania, Singapore, Slovakia, Spain, Switzerland, Thailand, the United Arab Emirates, and the United Kingdom. The company was formerly known as CHF Solutions, Inc. and changed its name to Nuwellis, Inc. in April 2021. Nuwellis, Inc. was founded in 1999 and is headquartered in Eden Prairie, Minnesota.

About Varex Imaging

Varex Imaging Corporation designs, manufactures, and sells X-ray imaging components. The company operates through two segments, Medical and Industrial. The Medical segment designs, manufactures, sells, and services X-ray imaging components, comprising X-ray tubes, digital detectors and accessories, ionization chambers, high voltage connectors, image-processing software and workstations, 3D reconstruction software, computer-aided diagnostic software, collimators, automatic exposure control devices, generators, and heat exchangers. This segment's products are used in a range of applications, including CT, mammography, oncology, cardiac, surgery, dental, and other diagnostic radiography uses. The Industrial segment designs, develops, manufactures, sells, and services Linatron X-ray linear accelerators, X-ray tubes, digital detectors, high voltage connectors, and coolers for use in security and inspection applications, such as baggage screening at airports, cargo screening at ports and borders, and nondestructive testing, irradiation, and inspection in various applications. The company sells its products through imaging system original equipment manufacturers, independent service companies, and distributors, as well as directly to end-users. It has operations in North America, South America, Europe, Russia, the Middle East, India, Africa, Asia, and Australia. Varex Imaging Corporation was incorporated in 2016 and is headquartered in Salt Lake City, Utah.