Critical Survey: Covidien (COV) & Steris Plc (STE)

Covidien (NYSE: COV) and Steris Plc (NYSE:STE) are both healthcare companies, but which is the superior investment? We will contrast the two businesses based on the strength of their valuation, analyst recommendations, institutional ownership, earnings, dividends, profitability and risk.

Profitability

This table compares Covidien and Steris Plc’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Covidien 19.02% 20.06% 9.92%
Steris Plc 4.63% 11.39% 6.54%

Dividends

Steris Plc pays an annual dividend of $1.24 per share and has a dividend yield of 1.4%. Covidien does not pay a dividend. Steris Plc pays out 88.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Covidien has increased its dividend for 7 consecutive years and Steris Plc has increased its dividend for 8 consecutive years.

Valuation & Earnings

This table compares Covidien and Steris Plc’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Covidien N/A N/A N/A N/A N/A
Steris Plc $2.58 billion 2.98 $521.33 million $1.40 64.51

Steris Plc has higher revenue and earnings than Covidien.

Insider & Institutional Ownership

93.3% of Steris Plc shares are owned by institutional investors. 2.6% of Steris Plc shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Covidien and Steris Plc, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Covidien 0 0 0 0 N/A
Steris Plc 0 2 3 0 2.60

Steris Plc has a consensus target price of $85.00, suggesting a potential downside of 5.89%. Given Steris Plc’s higher possible upside, analysts plainly believe Steris Plc is more favorable than Covidien.

Summary

Steris Plc beats Covidien on 7 of the 11 factors compared between the two stocks.

Covidien Company Profile

Covidien Public Limited Company is a healthcare products company. The Company is engaged in the development, manufacture and sale of healthcare products for use in clinical and home settings. The Company’s brands include Kendall, Nellcor, Puritan Bennett and Valleylab, among others. It has a presence in more than 70 countries, with products sold in over 150 countries. The Company’s segments include Medical Devices and United States Medical Supplies. Medical Devices includes marketing of advanced and general surgical solutions, peripheral vascular and neurovascular therapies, patient monitoring products, and airway and ventilation products. United States Medical Supplies includes products, such as nursing care, medical surgical, SharpSafety and original equipment manufacturer (OEM) products. The Company’s products include Surgical Solutions, Vascular Therapies, Respiratory and Patient Care.

Steris Plc Company Profile

STERIS plc provides infection prevention and other procedural products and services. The Company operates through four segments: Healthcare Products, which offers infection prevention and procedural solutions for healthcare providers, including capital equipment and related maintenance, and installation services, as well as consumables; Healthcare Specialty Services, which provides a range of specialty services for healthcare providers, including hospital sterilization services, instrument and scope repairs, and linen management; Life Sciences, which offers capital equipment and consumable products, and equipment maintenance and specialty services for pharmaceutical manufacturers and research facilities, and Applied Sterilization Technologies, which offers contract sterilization and laboratory services for medical device and pharmaceutical customers and others. Its Corporate and other segment includes the Defense and Industrial business unit.

Receive News & Ratings for Covidien Ltd Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Covidien Ltd and related companies with MarketBeat.com's FREE daily email newsletter.

Leave a Reply