Precision Optics (NASDAQ:POCI – Get Free Report) and Pro-Dex (NASDAQ:PDEX – Get Free Report) are both small-cap healthcare companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, analyst recommendations, profitability, valuation, earnings, risk and dividends.
Analyst Ratings
This is a summary of current ratings and recommmendations for Precision Optics and Pro-Dex, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Precision Optics | 1 | 0 | 0 | 0 | 1.00 |
| Pro-Dex | 0 | 1 | 1 | 1 | 3.00 |
Pro-Dex has a consensus price target of $74.00, indicating a potential upside of 5.68%. Given Pro-Dex’s stronger consensus rating and higher probable upside, analysts clearly believe Pro-Dex is more favorable than Precision Optics.
Valuation and Earnings
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Precision Optics | $31.53 million | 1.48 | -$5.78 million | ($0.63) | -6.78 |
| Pro-Dex | $77.55 million | 2.89 | $13.66 million | $4.13 | 16.95 |
Pro-Dex has higher revenue and earnings than Precision Optics. Precision Optics is trading at a lower price-to-earnings ratio than Pro-Dex, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Precision Optics and Pro-Dex’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Precision Optics | -11.51% | -26.98% | -13.79% |
| Pro-Dex | 17.62% | 25.13% | 16.02% |
Risk & Volatility
Precision Optics has a beta of 0.32, meaning that its share price is 68% less volatile than the S&P 500. Comparatively, Pro-Dex has a beta of 0.06, meaning that its share price is 94% less volatile than the S&P 500.
Insider and Institutional Ownership
13.7% of Precision Optics shares are held by institutional investors. Comparatively, 15.3% of Pro-Dex shares are held by institutional investors. 14.4% of Precision Optics 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 hedge funds, large money managers and endowments believe a company will outperform the market over the long term.
Summary
Pro-Dex beats Precision Optics on 14 of the 15 factors compared between the two stocks.
About Precision Optics
Precision Optics Corporation, Inc. designs, develops, manufactures, and sells specialized optical and illumination systems and related components primarily in the United States and the European Economic Area. It offers medical instrumentation products, including endoscopes and endocouplers, as well as other custom imaging and illumination products, such as Microprecision lenses and micro medical cameras, and 3D endoscopes for use in minimally invasive surgical procedures by hospitals and physicians. The company also provides components and assemblies for industrial and military use. It markets its products to medical device companies. The company was incorporated in 1982 and is based in Gardner, Massachusetts.
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.
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