Analyzing Pro-Dex (NASDAQ:PDEX) & Escalon Medical (OTCMKTS:ESMC)

Escalon Medical (OTCMKTS:ESMC) and Pro-Dex (NASDAQ:PDEX) are both small-cap medical companies, but which is the better investment? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, risk, valuation, earnings, dividends and profitability.

Profitability

This table compares Escalon Medical and Pro-Dex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Escalon Medical	0.88%	7.73%	2.16%
Pro-Dex	13.48%	26.67%	14.95%

Analyst Ratings

This is a summary of recent ratings for Escalon Medical and Pro-Dex, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Escalon Medical	0	0	0	0	0.00
Pro-Dex	0	1	1	0	2.50

Pro-Dex has a consensus price target of $56.00, suggesting a potential upside of 55.99%. Given Pro-Dex’s stronger consensus rating and higher probable upside, analysts plainly believe Pro-Dex is more favorable than Escalon Medical.

Insider & Institutional Ownership

15.3% of Pro-Dex shares are held by institutional investors. 1.9% of Escalon Medical shares are held by company insiders. Comparatively, 45.9% of Pro-Dex shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Escalon Medical has a beta of 0.13, meaning that its share price is 87% less volatile than the S&P 500. Comparatively, Pro-Dex has a beta of -0.11, meaning that its share price is 111% less volatile than the S&P 500.

Earnings and Valuation

This table compares Escalon Medical and Pro-Dex”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Escalon Medical	$12.05 million	0.09	$110,000.00	N/A	N/A
Pro-Dex	$66.59 million	1.77	$8.98 million	$3.35	10.72

Pro-Dex has higher revenue and earnings than Escalon Medical.

Summary

Pro-Dex beats Escalon Medical on 11 of the 12 factors compared between the two stocks.

About Escalon Medical

Escalon Medical Corp. engages in the development, manufacturing, marketing, and distribution of medical devices and pharmaceuticals in the area of ophthalmology in the United States and internationally. It offers A-Scan, which provides information about the internal structure of the eye; B-Scan, a diagnostic tool that supplies information to physicians where the media within the eye are cloudy or opaque; UBM, a high frequency/high resolution ultrasound device, which provides detailed information about the anterior segment of the eye; and Pachymeter that measures the thickness of cornea. The company also provides Ispan Intraocular Gases, such as C3F8 and SF6 that are used by vitreoretinal surgeons as a temporary tamponade in detached retina surgery; and AXIS Image management system for managing ophthalmic diagnostic images through the web browser from various devices. In addition, it markets disposable surgical packs used in vitreoretinal surgery, including packs that aid surgeons in the process of injecting and extracting silicone oil. Further, the company engages in the manufacturing and distribution of patented disposable universal gas kit, which delivers the gas from the canister to the patient. It sells its products to medical institutions through independent sales representatives, network of distributors, and internal sales employees. Escalon Medical Corp. was incorporated in 1987 and is headquartered in Wayne, Pennsylvania.

About Pro-Dex

Pro-Dex, Inc. designs, develops, manufactures, and sells powered surgical instruments for medical device original equipment manufacturers worldwide. The company offers autoclavable, battery-powered and electric, and multi-function surgical drivers and shavers that are primarily used in the orthopedic, thoracic, and craniomaxillofacial markets. It also provides engineering, quality, and regulatory consulting services; and manufactures and sells rotary air motors to various industries. The company's products are used in hospitals, medical engineering labs, scientific research facilities, and high-tech manufacturing operations. Pro-Dex, Inc. was founded in 1978 and is headquartered in Irvine, California.