Critical Comparison: Outset Medical (NASDAQ:OM) vs. Boston Scientific (NYSE:BSX)

Boston Scientific (NYSE:BSX) and Outset Medical (NASDAQ:OM) are both healthcare companies, but which is the superior investment? We will contrast the two companies based on the strength of their dividends, earnings, valuation, institutional ownership, profitability, risk and analyst recommendations.

Institutional & Insider Ownership

89.1% of Boston Scientific shares are owned by institutional investors. 0.3% of Boston Scientific shares are owned by insiders. Comparatively, 2.5% of Outset Medical shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Risk and Volatility

Boston Scientific has a beta of 0.57, meaning that its share price is 43% less volatile than the S&P 500. Comparatively, Outset Medical has a beta of 1.9, meaning that its share price is 90% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Boston Scientific and Outset Medical, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Boston Scientific	2	5	24	0	2.71
Outset Medical	1	1	3	0	2.40

Boston Scientific currently has a consensus price target of $71.46, indicating a potential upside of 66.20%. Outset Medical has a consensus price target of $10.00, indicating a potential upside of 211.53%. Given Outset Medical’s higher possible upside, analysts plainly believe Outset Medical is more favorable than Boston Scientific.

Earnings & Valuation

This table compares Boston Scientific and Outset Medical”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Boston Scientific	$20.07 billion	3.10	$2.90 billion	$2.47	17.41
Outset Medical	$117.80 million	0.51	-$81.65 million	($4.09)	-0.78

Boston Scientific has higher revenue and earnings than Outset Medical. Outset Medical is trading at a lower price-to-earnings ratio than Boston Scientific, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Boston Scientific and Outset Medical’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Boston Scientific	17.50%	19.28%	10.89%
Outset Medical	-63.06%	-61.67%	-28.25%

Summary

Boston Scientific beats Outset Medical on 11 of the 14 factors compared between the two stocks.

About Boston Scientific

Boston Scientific Corporation develops, manufactures, and markets medical devices for use in various interventional medical specialties worldwide. It operates through two segments, MedSurg and Cardiovascular. The company offers devices to diagnose and treat gastrointestinal and pulmonary conditions, such as resolution clips, biliary stent systems, stents and electrocautery enhanced delivery systems, direct visualization systems, digital catheters, and single-use duodenoscopes; devices to treat urological conditions, including ureteral stents, catheters, baskets, guidewires, sheaths, balloons, single-use digital flexible ureteroscopes, holmium laser systems, artificial urinary sphincter, laser system, fiber, and hydrogel systems; and devices to treat neurological movement disorders and manage chronic pain, such as spinal cord stimulator system, proprietary programming software, radiofrequency generator, indirect decompression systems, practice optimization tools, and deep brain stimulation system. It also provides technologies for diagnosing and treating coronary artery disease and aortic valve conditions; WATCHMAN FLX, a Left Atrial Appendage Closure Device; and implantable devices that monitor the heart and deliver electricity to treat cardiac abnormalities, such as cardioverter and cardiac resynchronization therapy defibrillators, MRI S-ICD systems, cardiac resynchronization therapy pacemakers, quadripolar LV leads, ICD leads, pacing leads, remote patient management systems, insertable cardiac monitor systems, and remote cardiac monitoring systems. In addition, the company offers diagnosis and treatment of rate and rhythm disorders of the heart; peripheral arterial and venous diseases; and products to diagnose, treat and ease forms of cancer. The company was incorporated in 1979 and is headquartered in Marlborough, Massachusetts.

About Outset Medical

Outset Medical, Inc., a medical technology company, engages in the development of a hemodialysis system for hemodialysis in the United States. The company offers Tablo Hemodialysis System, a compact console with integrated water purification, on-demand dialysate production, and software and connectivity capabilities for dialysis care in acute and home settings; and manufactures, supports, and distributes for Tablo console, Tablo cartridge, and other consumables. It also provides Tablo Data Ecosystem, including TabloHub, a customer-facing portal; MyTablo, a patient-facing portal; and TabloDash, an internal data analytics platform. The company was formerly known as Home Dialysis Plus, Ltd. and changed its name to Outset Medical, Inc. in January 2015. Outset Medical, Inc. was incorporated in 2003 and is headquartered in San Jose, California.