Head-To-Head Contrast: Spectral Medical (OTCMKTS:EDTXF) vs. Stryker (NYSE:SYK)

Spectral Medical (OTCMKTS:EDTXF) and Stryker (NYSE:SYK) are both medical companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, profitability, institutional ownership, analyst recommendations, valuation, dividends and risk.

Profitability

This table compares Spectral Medical and Stryker’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Spectral Medical	-1,245.87%	N/A	-351.89%
Stryker	13.25%	23.58%	11.37%

Institutional & Insider Ownership

77.1% of Stryker shares are owned by institutional investors. 1.5% of Spectral Medical shares are owned by insiders. Comparatively, 5.9% of Stryker 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.

Analyst Ratings

This is a breakdown of recent ratings and price targets for Spectral Medical and Stryker, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Spectral Medical	0	0	0	0	0.00
Stryker	0	4	15	0	2.79

Stryker has a consensus price target of $423.53, suggesting a potential upside of 24.58%. Given Stryker’s stronger consensus rating and higher possible upside, analysts plainly believe Stryker is more favorable than Spectral Medical.

Valuation & Earnings

This table compares Spectral Medical and Stryker”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Spectral Medical	$1.18 million	140.05	-$11.60 million	($0.07)	-8.28
Stryker	$22.60 billion	5.74	$2.99 billion	$7.76	43.81

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

Risk and Volatility

Spectral Medical has a beta of 0.54, suggesting that its stock price is 46% less volatile than the S&P 500. Comparatively, Stryker has a beta of 0.93, suggesting that its stock price is 7% less volatile than the S&P 500.

Summary

Stryker beats Spectral Medical on 13 of the 14 factors compared between the two stocks.

About Spectral Medical

Spectral Medical Inc. focuses on the development and commercialization of products for the treatment of septic shock in the United States, Italy, Ireland, and internationally. The company markets Endotoxin Activity Assay, a rapid in vitro diagnostic test for the detection of components of gram negative bacterial cell wall; and Polymyxin B Hemoperfusion, a therapeutic hemoperfusion device that removes endotoxin from the bloodstream. It also develops and manufactures monoclonal and polyclonal antibodies, recombinant cardiac proteins, and calibrators for use in the research and development, as well as products that are manufactured by other diagnostic companies. The company was formerly known as Spectral Diagnostics Inc. and changed its name to Spectral Medical Inc. in December 2014. Spectral Medical Inc. was incorporated in 1991 and is headquartered in Toronto, Canada.

About Stryker

Stryker Corporation operates as a medical technology company. The company operates through two segments, MedSurg and Neurotechnology, and Orthopaedics and Spine. The Orthopaedics and Spine segment provides implants for use in total joint replacements, such as hip, knee and shoulder, and trauma and extremities surgeries. This segment also offers spinal implant products comprising cervical and thoracolumbar systems that include fixation, minimally invasive and interbody systems used in spinal injury, complex spine and degenerative therapies. The MedSurg and Neurotechnology segment offers surgical equipment, and surgical navigation systems, endoscopic and communications systems, patient handling, emergency medical equipment and intensive care disposable products, reprocessed and remanufactured medical devices, clinical communication and workflow solutions, and other medical device products that are used in various medical specialties, as well as patient and caregiver safety technologies. This segment also provides neurosurgical, neurovascular and craniomaxillofacial implant products, which include products used for minimally invasive endovascular procedures; products for brain and open skull based surgical procedures; orthobiologic and biosurgery products, such as synthetic bone grafts and vertebral augmentation products; minimally invasive products for the treatment of acute ischemic and hemorrhagic stroke; and craniomaxillofacial implant products, including cranial, maxillofacial, and chest wall devices, as well as dural substitutes and sealants. The company sells its products to doctors, hospitals, and other healthcare facilities through company-owned subsidiaries and branches, as well as third-party dealers and distributors in approximately 75 countries. Stryker Corporation was founded in 1941 and is headquartered in Portage, Michigan.