Financial Contrast: Covalon Technologies (OTCMKTS:CVALF) and Orthofix Medical (NASDAQ:OFIX)

Covalon Technologies (OTCMKTS:CVALF) and Orthofix Medical (NASDAQ:OFIX) are both small-cap medical companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, institutional ownership, profitability, valuation, analyst recommendations, risk and earnings.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Covalon Technologies and Orthofix Medical, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Covalon Technologies	0	0	0	0	0.00
Orthofix Medical	1	1	4	0	2.50

Orthofix Medical has a consensus price target of $21.50, indicating a potential upside of 44.83%. Given Orthofix Medical’s stronger consensus rating and higher probable upside, analysts plainly believe Orthofix Medical is more favorable than Covalon Technologies.

Valuation & Earnings

This table compares Covalon Technologies and Orthofix Medical”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Covalon Technologies	$22.91 million	1.75	$1.96 million	$0.05	29.22
Orthofix Medical	$818.06 million	0.72	-$126.00 million	($3.03)	-4.90

Covalon Technologies has higher earnings, but lower revenue than Orthofix Medical. Orthofix Medical is trading at a lower price-to-earnings ratio than Covalon Technologies, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Covalon Technologies has a beta of 0.53, meaning that its stock price is 47% less volatile than the S&P 500. Comparatively, Orthofix Medical has a beta of 0.9, meaning that its stock price is 10% less volatile than the S&P 500.

Profitability

This table compares Covalon Technologies and Orthofix Medical’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Covalon Technologies	7.00%	7.77%	6.75%
Orthofix Medical	-15.29%	-25.43%	-14.46%

Institutional and Insider Ownership

89.8% of Orthofix Medical shares are owned by institutional investors. 1.3% of Orthofix Medical shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

About Covalon Technologies

Covalon Technologies Ltd. engages in the research, development, manufacturing, and marketing of medical products in infection management, advanced wound care, and surgical procedure areas in the United States, Canada, the Middle East, Asia, Latin America, and internationally. The company’s platform technologies comprise collagen matrix platform that is used to manufacture a family of products to treat chronic and infected wounds, including diabetic ulcers, pressure ulcers, venous ulcers, donor and graft sites, traumatic wounds healing by secondary intention, dehisced surgical wounds, and first and second degree burns; and antimicrobial silicone adhesive platform, which is used for family of pre and post-surgical, and vascular access products that are designed to kill bacteria or yeast that comes into contact with the antimicrobial silicone providing broad-spectrum antimicrobial activity. It also offers medical coating platform, a process that utilizes photo-polymerization to create active grafting sites where new polymer chains are initiated and propagated from the surface of an existing medical device. In addition, the company provides wound care dressings; surgical and peri-operative; and infection management products. It offers its products under the Covalon brand name through third-party distribution networks and company’s direct sales force. The company serves hospitals, wound care centers, burn centers, extended/alternate care and acute care facilities, home health care agencies, and physicians’ offices. Covalon Technologies Ltd. is headquartered in Mississauga, Canada.

About Orthofix Medical

Orthofix Medical Inc. operates as a spine and orthopedics company in the United States, Italy, Germany, the United Kingdom, France, Brazil, and internationally. It operates through two segments, Global Spine and Global Orthopedics. The Global Spine segment manufactures and distributes bone growth stimulator devices for enhance of bone fusion, including adjunctive and noninvasive treatment of cervical and lumbar spine, as well as a therapeutic treatment for non-spine; designs, develops, and markets a portfolio of motion preservation and fixation implant products, which are used in surgical procedures of the spine; and offers biological products, such as fiber-based and particulate demineralized bone matrices, cellular bone allografts, collagen ceramic matrices, and synthetic bone void fillers, and tissue forms, which allow physicians to treat various spinal and orthopedic conditions. This segment also designs, develops, and markets a portfolio of navigation technologies, including tracked surgical tools, intelligent software, and imaging equipment based on machine-vision and optical innovations. The Global Orthopedics segment offers products and solutions that allow physicians to treat various orthopedic conditions related to limb reconstruction and deformity correction unrelated to the spine. This segment designs, develops, and markets external and internal fixation orthopedic products that are coupled with enabling digital technologies to serve the complete patient treatment pathway. It sells its products through distributors and sales representatives to hospitals, healthcare organizations, and healthcare providers. The company was formerly known as Orthofix International N.V. and changed its name to Orthofix Medical Inc. in 2018. Orthofix Medical Inc. was founded in 1980 and is headquartered in Lewisville, Texas.