Contrasting CareDx (NASDAQ:CDNA) and Sotera Health (NASDAQ:SHC)

Sotera Health (NASDAQ:SHC) and CareDx (NASDAQ:CDNA) are both medical companies, but which is the superior investment? We will compare the two companies based on the strength of their analyst recommendations, risk, earnings, profitability, institutional ownership, valuation and dividends.

Insider & Institutional Ownership

91.0% of Sotera Health shares are held by institutional investors. 55.1% of Sotera Health shares are held by company insiders. Comparatively, 4.4% of CareDx 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.

Analyst Ratings

This is a breakdown of recent ratings for Sotera Health and CareDx, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sotera Health	0	3	4	0	2.57
CareDx	1	4	4	0	2.33

Sotera Health presently has a consensus price target of $17.67, suggesting a potential upside of 15.77%. CareDx has a consensus price target of $26.00, suggesting a potential upside of 67.63%. Given CareDx’s higher possible upside, analysts clearly believe CareDx is more favorable than Sotera Health.

Valuation & Earnings

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sotera Health	$1.10 billion	3.94	$44.34 million	$0.19	80.32
CareDx	$358.00 million	2.23	$52.55 million	$1.19	13.03

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

Profitability

This table compares Sotera Health and CareDx’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sotera Health	4.82%	43.69%	6.54%
CareDx	17.97%	18.03%	12.88%

Risk and Volatility

Sotera Health has a beta of 1.82, meaning that its stock price is 82% more volatile than the S&P 500. Comparatively, CareDx has a beta of 2.5, meaning that its stock price is 150% more volatile than the S&P 500.

Summary

Sotera Health beats CareDx on 7 of the 13 factors compared between the two stocks.

About Sotera Health

Sotera Health Company engages in the provision of sterilization, lab testing, and advisory services in the United States and internationally. The company operates through three segments: Sterigenics, Nordion, and Nelson Labs. It provides mission-critical end-to-end sterilization services, including gamma and electron beam irradiation, and ethylene oxide processing, as well as designs, installs, and maintains gamma irradiation systems. The company also provides microbiological and analytical chemistry testing, as well as technical assistance, regulatory consulting, and advisory services. It serves medical devices, pharmaceuticals, food safety, agricultural products, cancer treatment, and high-performance materials industries, as well as commercial, advanced, and specialty application industries. The company was formerly known as Sotera Health Topco, Inc. and changed its name to Sotera Health Company in October 2020. Sotera Health Company was incorporated in 2015 and is headquartered in Broadview Heights, Ohio.

About CareDx

CareDx, Inc. engages in the discovery, development, and commercialization of diagnostic solutions for transplant patients and caregivers in the United States and internationally. It also provides AlloSure Kidney, a donor-derived cell-free DNA (dd-cfDNA) solution for kidney transplant patients; AlloMap Heart, a gene expression solution for heart transplant patients; AlloSure Heart, a dd-cfDNA solution for heart transplant patients; and AlloSure Lung, a dd-cfDNA solution for lung transplant patients. The company offers Olerup SSP, which is used to type human leukocyte antigen (HLA) alleles based on sequence specific primer technology; QTYPE that enables precision in HLA typing; and Ottr, a transplant patient management software. In addition, it provides AlloSeq Tx, a high-resolution HLA typing solution; AlloSeq cfDNA, a surveillance solution to measure dd-cfDNA in blood; AlloSeq HCT, a solution for chimerism testing for stem cell transplant recipients; Allocell, a surveillance solution that monitors the level of engraftment and persistence of allogeneic cells for patients who have received cell therapy transplants; and XynQAPI cloud-based transplant quality management software, as well as AlloCare, a mobile app that offers a patient-centric resource for transplant recipients. The company offers its products directly to customers, as well as through third-party distributors and sub-distributors. It has a license agreement with Illumina, Inc. for the distribution, development, and commercialization of NGS products and technologies; and Cibiltech SAS to commercialize iBox, a software for the predictive analysis of post-transplantation kidney allograft loss. The company was formerly known as XDx, Inc. and changed its name to CareDx, Inc. in March 2014. The company was incorporated in 1998 and is headquartered in South San Francisco, California.