Critical Analysis: STAAR Surgical (NASDAQ:STAA) vs. Cardinal Health (NYSE:CAH)

Cardinal Health (NYSE:CAH) and STAAR Surgical (NASDAQ:STAA) are both medical companies, but which is the superior stock? We will contrast the two businesses based on the strength of their analyst recommendations, earnings, valuation, risk, institutional ownership, profitability and dividends.

Insider and Institutional Ownership

87.2% of Cardinal Health shares are held by institutional investors. Comparatively, 96.7% of STAAR Surgical shares are held by institutional investors. 0.1% of Cardinal Health shares are held by company insiders. Comparatively, 0.6% of STAAR Surgical shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Risk & Volatility

Cardinal Health has a beta of 0.72, meaning that its stock price is 28% less volatile than the S&P 500. Comparatively, STAAR Surgical has a beta of 0.82, meaning that its stock price is 18% less volatile than the S&P 500.

Valuation and Earnings

This table compares Cardinal Health and STAAR Surgical”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Cardinal Health	$234.31 billion	0.20	$1.56 billion	$6.63	29.46
STAAR Surgical	$224.45 million	5.56	-$20.21 million	($1.93)	-13.10

Cardinal Health has higher revenue and earnings than STAAR Surgical. STAAR Surgical is trading at a lower price-to-earnings ratio than Cardinal Health, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations for Cardinal Health and STAAR Surgical, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Cardinal Health	0	2	11	0	2.85
STAAR Surgical	1	10	0	0	1.91

Cardinal Health currently has a consensus price target of $200.54, suggesting a potential upside of 2.68%. STAAR Surgical has a consensus price target of $20.67, suggesting a potential downside of 18.25%. Given Cardinal Health’s stronger consensus rating and higher possible upside, equities analysts plainly believe Cardinal Health is more favorable than STAAR Surgical.

Profitability

This table compares Cardinal Health and STAAR Surgical’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Cardinal Health	0.70%	-74.45%	4.14%
STAAR Surgical	-42.45%	-16.11%	-12.54%

Summary

Cardinal Health beats STAAR Surgical on 9 of the 14 factors compared between the two stocks.

About Cardinal Health

Cardinal Health, Inc. operates as a healthcare services and products company in the United States, Canada, Europe, Asia, and internationally. It provides customized solutions for hospitals, healthcare systems, pharmacies, ambulatory surgery centers, clinical laboratories, physician offices, and patients in the home. The company operates in two segments, Pharmaceutical and Medical. The Pharmaceutical segment distributes branded and generic pharmaceutical, specialty pharmaceutical, and over-the-counter healthcare and consumer products. The segment also provides services to pharmaceutical manufacturers and healthcare providers for specialty pharmaceutical products; operates nuclear pharmacies and radiopharmaceutical manufacturing facilities; repackages generic pharmaceuticals and over-the-counter healthcare products; and provides pharmacy management services to hospitals. The Medical segment manufactures, sources, and distributes Cardinal Health branded medical, surgical, and laboratory products and devices that include exam and surgical gloves; needles, syringe, and sharps disposals; compressions; incontinences; nutritional delivery products; wound care products; single-use surgical drapes, gowns, and apparels; fluid suction and collection systems; urology products; operating room supply products; and electrode product lines. The segment also distributes a range of national brand products, including medical, surgical, and laboratory products; provides supply chain services and solutions to hospitals, ambulatory surgery centers, clinical laboratories, and other healthcare providers; and assembles and sells sterile, and non-sterile procedure kits. The company was incorporated in 1979 and is headquartered in Dublin, Ohio.

About STAAR Surgical

STAAR Surgical Company, together with its subsidiaries, designs, develops, manufactures, markets, and sells implantable lenses for the eye, and companion delivery systems to deliver the lenses into the eye. The company provides implantable Collamer lens product family (ICLs) to treat visual disorders, such as myopia, hyperopia, astigmatism, and presbyopia. It markets its products to health care providers, including ophthalmic surgeons, vision and surgical centers, hospitals, government facilities, and distributors, as well as products are primarily used by ophthalmologists. The company sells its products directly through its sales representatives in the United States, Japan, Germany, Spain, Canada, the United Kingdom, and Singapore, as well as through own representatives and independent distributors in China, Korea, India, France, Benelux, Italy, and internationally. STAAR Surgical Company was incorporated in 1982 and is headquartered in Lake Forest, California.