Critical Review: Neovasc (NVCN) versus Koninklijke Philips N.V. (PHG)

Neovasc (NASDAQ: NVCN) and Koninklijke Philips N.V. (NYSE:PHG) are both medical companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, risk, dividends, valuation and earnings.

Risk & Volatility

Neovasc has a beta of 0.36, suggesting that its stock price is 64% less volatile than the S&P 500. Comparatively, Koninklijke Philips N.V. has a beta of 1.36, suggesting that its stock price is 36% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Neovasc and Koninklijke Philips N.V., as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Neovasc 0 0 3 0 3.00
Koninklijke Philips N.V. 0 5 5 0 2.50

Neovasc presently has a consensus price target of $6.33, suggesting a potential upside of 286.18%. Koninklijke Philips N.V. has a consensus price target of $33.50, suggesting a potential downside of 18.67%. Given Neovasc’s stronger consensus rating and higher probable upside, analysts plainly believe Neovasc is more favorable than Koninklijke Philips N.V..

Valuation & Earnings

This table compares Neovasc and Koninklijke Philips N.V.’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Neovasc $8.58 million 15.08 -$23.14 million ($0.14) -11.71
Koninklijke Philips N.V. $29.91 billion 1.30 $3.81 billion $1.74 23.67

Koninklijke Philips N.V. has higher revenue and earnings than Neovasc. Neovasc is trading at a lower price-to-earnings ratio than Koninklijke Philips N.V., indicating that it is currently the more affordable of the two stocks.

Dividends

Koninklijke Philips N.V. pays an annual dividend of $0.73 per share and has a dividend yield of 1.8%. Neovasc does not pay a dividend. Koninklijke Philips N.V. pays out 42.0% of its earnings in the form of a dividend. Koninklijke Philips N.V. has increased its dividend for 4 consecutive years.

Institutional and Insider Ownership

19.6% of Neovasc shares are owned by institutional investors. Comparatively, 7.6% of Koninklijke Philips N.V. shares are owned by institutional investors. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Profitability

This table compares Neovasc and Koninklijke Philips N.V.’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Neovasc -68.34% -58.08% 23.23%
Koninklijke Philips N.V. 6.39% 8.92% 3.85%

Summary

Koninklijke Philips N.V. beats Neovasc on 10 of the 16 factors compared between the two stocks.

Neovasc Company Profile

Neovasc Inc. (Neovasc) is a specialty medical device company. The Company develops, manufactures and markets products for the cardiovascular marketplace. The Company’s segment is the development, manufacture and marketing of medical devices. Its products include the Tiara technology in development for the transcatheter treatment of mitral valve disease, the Neovasc Reducer for the treatment of refractory angina, and tissue products. The Tiara is in preclinical/early clinical stage development to provide a minimally invasive transcatheter device for patients experiencing mitral regurgitation (MR) as a result of mitral heart valve disease. The Reducer is an hourglass-shaped, balloon-expandable, stainless steel, bare metal device, which is implanted in the coronary sinus, creating a restriction in venous outflow from the myocardium (the muscular layer of the heart wall). Neovasc produces Peripatch, a biological tissue product that is manufactured from pericardium.

Koninklijke Philips N.V. Company Profile

Koninklijke Philips N.V. is the Netherlands-based health technology company. The Company’s segments include Personal Health businesses, Diagnosis & Treatment businesses, Connected Care & Health Informatics businesses, HealthTech Other and Legacy Items. The Personal Health businesses segment is engaged in the health continuum, delivering integrated, connected solutions that support healthier lifestyles and those living with chronic disease. The Diagnosis & Treatment businesses segment delivers precision medicine and treatment, and therapy. The Connected Care & Health Informatics businesses segment provides consumers, care givers and clinicians with digital solutions that facilitate care by enabling precision medicine and population health management. The HealthTech Other segment comprises such items, as innovation, emerging businesses, royalties, among others. The Legacy Items segment consists mainly of separation costs, legacy legal items, legacy pension costs, among others.

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