Zimmer Biomet (NYSE:ZBH) and MSA Safety (NYSE:MSA) are both medical companies, but which is the better stock? We will compare the two businesses based on the strength of their earnings, dividends, risk, profitability, institutional ownership, valuation and analyst recommendations.
Analyst Ratings
This is a breakdown of recent ratings and target prices for Zimmer Biomet and MSA Safety, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Zimmer Biomet | 1 | 3 | 16 | 3 | 2.91 |
MSA Safety | 0 | 1 | 2 | 0 | 2.67 |
Zimmer Biomet presently has a consensus target price of $167.8636, suggesting a potential downside of 3.41%. MSA Safety has a consensus target price of $151.50, suggesting a potential downside of 1.39%. Given MSA Safety's higher probable upside, analysts clearly believe MSA Safety is more favorable than Zimmer Biomet.
Dividends
Zimmer Biomet pays an annual dividend of $0.96 per share and has a dividend yield of 0.6%. MSA Safety pays an annual dividend of $1.72 per share and has a dividend yield of 1.1%. Zimmer Biomet pays out 12.2% of its earnings in the form of a dividend. MSA Safety pays out 35.8% 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. Zimmer Biomet has increased its dividend for 1 consecutive years and MSA Safety has increased its dividend for 11 consecutive years. MSA Safety is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional & Insider Ownership
87.2% of Zimmer Biomet shares are owned by institutional investors. Comparatively, 77.2% of MSA Safety shares are owned by institutional investors. 0.4% of Zimmer Biomet shares are owned by insiders. Comparatively, 7.0% of MSA Safety shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.
Volatility & Risk
Zimmer Biomet has a beta of 1.34, suggesting that its share price is 34% more volatile than the S&P 500. Comparatively, MSA Safety has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500.
Profitability
This table compares Zimmer Biomet and MSA Safety's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Zimmer Biomet | 0.52% | 10.07% | 4.93% |
MSA Safety | 10.40% | 23.96% | 10.13% |
Valuation and Earnings
This table compares Zimmer Biomet and MSA Safety's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Zimmer Biomet | $7.98 billion | 4.51 | $1.13 billion | $7.87 | 21.97 |
MSA Safety | $1.40 billion | 4.30 | $136.44 million | $4.80 | 32.10 |
Zimmer Biomet has higher revenue and earnings than MSA Safety. Zimmer Biomet is trading at a lower price-to-earnings ratio than MSA Safety, indicating that it is currently the more affordable of the two stocks.
Summary
Zimmer Biomet beats MSA Safety on 11 of the 18 factors compared between the two stocks.