Critical Analysis: Embecta (NASDAQ:EMBC) and TransMedics Group (NASDAQ:TMDX)

TransMedics Group (NASDAQ:TMDX) and Embecta (NASDAQ:EMBC) are both healthcare companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Insider & Institutional Ownership

99.7% of TransMedics Group shares are held by institutional investors. Comparatively, 93.8% of Embecta shares are held by institutional investors. 6.9% of TransMedics Group shares are held by company insiders. Comparatively, 1.3% of Embecta shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Risk and Volatility

TransMedics Group has a beta of 1.9, suggesting that its share price is 90% more volatile than the S&P 500. Comparatively, Embecta has a beta of 0.86, suggesting that its share price is 14% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and price targets for TransMedics Group and Embecta, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
TransMedics Group	1	6	5	0	2.33
Embecta	2	3	0	0	1.60

TransMedics Group presently has a consensus target price of $121.10, suggesting a potential upside of 39.74%. Embecta has a consensus target price of $11.00, suggesting a potential upside of 111.95%. Given Embecta’s higher possible upside, analysts clearly believe Embecta is more favorable than TransMedics Group.

Earnings and Valuation

This table compares TransMedics Group and Embecta”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
TransMedics Group	$605.49 million	4.95	$190.29 million	$3.89	22.28
Embecta	$1.08 billion	0.27	$95.40 million	$1.48	3.51

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

Profitability

This table compares TransMedics Group and Embecta’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
TransMedics Group	22.69%	15.88%	5.95%
Embecta	8.59%	-19.25%	10.82%

Summary

TransMedics Group beats Embecta on 11 of the 14 factors compared between the two stocks.

About TransMedics Group

TransMedics Group, Inc., a commercial-stage medical technology company, engages in transforming organ transplant therapy for end-stage organ failure patients in the United States and internationally. The company offers Organ Care System (OCS), a portable organ perfusion, optimization, and monitoring system that utilizes its proprietary and customized technology to replicate near-physiologic conditions for donor organs outside of the human body. Its OCS includes OCS LUNG for the preservation of standard criteria donor lungs for double-lung transplantation; OCS Heart, a technology for preservation of DBD donor hearts deemed unsuitable due to limitations of cold storage and for ex vivo reanimation, functional monitoring, and beating-heart preservation of donation-after-circulatory-death hearts; and OCS Liver for the preservation of DBD and DCD of donor livers. The company also developed national OCS program, a turnkey solution for outsourced organ retrieval; and provides OCS organ management and logistics services, including aviation and ground transportation, and other coordination activity. The company was founded in 1998 and is headquartered in Andover, Massachusetts.

About Embecta

Embecta Corp., a medical device company, focuses on the provision of various solutions to enhance the health and wellbeing of people living with diabetes. Its products include pen needles, syringes, and safety injection devices, as well as digital applications to assist people with managing patient's diabetes. The company primarily sells its products to wholesalers and distributors in the United States and internationally. Embecta Corp. was founded in 1924 and is headquartered in Parsippany, New Jersey.