CONMED (NYSE:CNMD) and Cardinal Health (NYSE:CAH) Critical Survey

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
CONMED	9.02%	14.36%	5.86%
Cardinal Health	0.70%	-68.84%	4.21%

Valuation & Earnings

This table compares CONMED and Cardinal Health”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CONMED	$1.31 billion	1.26	$132.42 million	$3.80	13.98
Cardinal Health	$226.83 billion	0.17	$852.00 million	$6.41	25.86

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

Institutional & Insider Ownership

87.2% of Cardinal Health shares are held by institutional investors. 3.1% of CONMED shares are held by company insiders. Comparatively, 0.1% of Cardinal Health shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Risk & Volatility

CONMED has a beta of 1.2, suggesting that its share price is 20% more volatile than the S&P 500. Comparatively, Cardinal Health has a beta of 0.68, suggesting that its share price is 32% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and recommmendations for CONMED and Cardinal Health, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CONMED	0	4	1	0	2.20
Cardinal Health	0	3	11	0	2.79

CONMED currently has a consensus price target of $62.20, suggesting a potential upside of 17.13%. Cardinal Health has a consensus price target of $157.43, suggesting a potential downside of 5.01%. Given CONMED’s higher probable upside, research analysts clearly believe CONMED is more favorable than Cardinal Health.

Dividends

CONMED pays an annual dividend of $0.80 per share and has a dividend yield of 1.5%. Cardinal Health pays an annual dividend of $2.04 per share and has a dividend yield of 1.2%. CONMED pays out 21.1% of its earnings in the form of a dividend. Cardinal Health pays out 31.8% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Cardinal Health has increased its dividend for 29 consecutive years. CONMED is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

CONMED beats Cardinal Health on 9 of the 17 factors compared between the two stocks.

About CONMED

CONMED Corporation, a medical technology company, develops, manufactures, and sells surgical devices and related equipment for surgical procedures worldwide. The company offers orthopedic surgery products, including BioBrace, TruShot with Y-Knot All-In-One Soft Tissue Fixation System, Y-knot All-Suture Anchors, and Agro Knotless Suture Anchors, which provide clinical solutions to orthopedic surgeons for the augmentation and repair of soft tissue injuries, as well as provides supporting products that enable surgeons to perform minimally invasive sports medicine surgeries. It markets orthopedic surgery products under the Hall, CONMED Linvatec, Concept, and Shutt brands. The company also provides battery-powered and autoclavable bone power tool systems for use in orthopedic, arthroscopic, oral/maxillofacial, podiatric, spinal, and cardiothoracic surgeries under Hall surgical brand name. In addition, it offers general surgery products, including clinical insufflation systems under AirSeal brand; smoke removal devices under Buffalo Filter brand; endomechanical products, such as tissue retrieval bags, trocars, suction irrigation devices, graspers, scissors, and dissectors used in minimally invasive surgeries; and electrosurgical solution comprising monopolar and bipolar generators, argon beam coagulation generators, handpieces, smoke management systems and other accessories. Further, the company provides endoscopic technologies, including therapeutic and diagnostic products for use in gastroenterology procedures, and products for the treatment of diseases of the dilatation, hemostasis, biliary, structure management, and infection prevention and patient monitoring, including ECG and EEG electrodes, and cardiac defibrillation pads. It markets its products directly to hospitals, surgery centers, and other healthcare institutions, as well as through medical specialty distributors. CONMED Corporation was incorporated in 1970 and is headquartered in Largo, Florida.

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.