Contrasting Medtronic (NYSE:MDT) & Phibro Animal Health (NASDAQ:PAHC)

Medtronic (NYSE:MDT) and Phibro Animal Health (NASDAQ:PAHC) are both medical companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, risk, dividends, institutional ownership, earnings, valuation and analyst recommendations.

Profitability

This table compares Medtronic and Phibro Animal Health’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Medtronic	13.63%	14.61%	7.85%
Phibro Animal Health	3.73%	32.14%	6.89%

Analyst Ratings

This is a breakdown of current ratings for Medtronic and Phibro Animal Health, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Medtronic	1	9	12	1	2.57
Phibro Animal Health	2	4	1	1	2.13

Medtronic currently has a consensus target price of $102.82, indicating a potential upside of 10.17%. Phibro Animal Health has a consensus target price of $28.40, indicating a potential downside of 31.86%. Given Medtronic’s stronger consensus rating and higher probable upside, equities analysts plainly believe Medtronic is more favorable than Phibro Animal Health.

Earnings and Valuation

This table compares Medtronic and Phibro Animal Health”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Medtronic	$33.54 billion	3.57	$4.66 billion	$3.63	25.71
Phibro Animal Health	$1.30 billion	1.30	$48.26 million	$1.18	35.32

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

Dividends

Medtronic pays an annual dividend of $2.84 per share and has a dividend yield of 3.0%. Phibro Animal Health pays an annual dividend of $0.48 per share and has a dividend yield of 1.2%. Medtronic pays out 78.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Phibro Animal Health pays out 40.7% of its earnings in the form of a dividend. 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.

Volatility & Risk

Medtronic has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500. Comparatively, Phibro Animal Health has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500.

Insider and Institutional Ownership

82.1% of Medtronic shares are held by institutional investors. Comparatively, 99.3% of Phibro Animal Health shares are held by institutional investors. 0.3% of Medtronic shares are held by company insiders. Comparatively, 50.1% of Phibro Animal Health shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Medtronic beats Phibro Animal Health on 11 of the 17 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 Phibro Animal Health

Phibro Animal Health Corporation operates as an animal health and mineral nutrition company in the United States, Israel, Brazil, Ireland, and internationally. It operates through three segments: Animal Health, Mineral Nutrition, and Performance Products. The company develops, manufactures, and markets various products for food and companion animals including poultry, swine, beef and dairy cattle, aquaculture, and dogs. It also offers animal health products, such as antibacterials, anticoccidials, nutritional specialty, and vaccines and vaccine adjuvants for animal’s health and performance, food safety, and animal welfare; and engages in development, manufacturing, and marketing of microbial and bioproducts for various applications serving animal health and nutrition, environmental, industrial, and agricultural customers. In addition, the company develops, manufactures, and markets conventionally licensed and autogenous vaccine products, as well as adjuvants for animal vaccine manufacturers. Further, it provides formulations and concentrations of trace minerals, such as zinc, manganese, copper, iron, and other compounds to fortify the daily feed requirements of their livestock’s diets and maintain optimal balance of trace elements in animals. Additionally, the company offers specialty ingredients for personal care, industrial chemical, and chemical catalyst industries. It sells its animal health and mineral nutrition products through local sales offices to integrated poultry, swine, and cattle producers, as well as through commercial animal feed manufacturers, wholesalers, and distributors. The company was formerly known as Philipp Brothers Chemicals, Inc. and changed its name to Phibro Animal Health Corporation in July 2003. Phibro Animal Health Corporation was founded in 1946 and is headquartered in Teaneck, New Jersey.