Head-To-Head Comparison: ResMed (NYSE:RMD) & Terumo (OTCMKTS:TRUMY)

ResMed (NYSE:RMD) and Terumo (OTCMKTS:TRUMY) are both large-cap healthcare companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, earnings, valuation, institutional ownership and risk.

Earnings & Valuation

This table compares ResMed and Terumo”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
ResMed	$5.65 billion	5.82	$1.52 billion	$10.98	21.30
Terumo	$7.52 billion	3.10	$897.03 million	$0.71	22.23

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

Profitability

This table compares ResMed and Terumo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
ResMed	27.79%	26.42%	19.43%
Terumo	13.83%	10.44%	7.34%

Analyst Ratings

This is a summary of recent ratings and recommmendations for ResMed and Terumo, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
ResMed	0	11	7	0	2.39
Terumo	0	0	0	2	4.00

ResMed currently has a consensus price target of $253.69, indicating a potential upside of 8.48%. Given ResMed’s higher possible upside, equities analysts plainly believe ResMed is more favorable than Terumo.

Institutional and Insider Ownership

55.0% of ResMed shares are owned by institutional investors. 0.6% of ResMed shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

ResMed pays an annual dividend of $2.64 per share and has a dividend yield of 1.1%. Terumo pays an annual dividend of $0.05 per share and has a dividend yield of 0.3%. ResMed pays out 24.0% of its earnings in the form of a dividend. Terumo pays out 7.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. ResMed has raised its dividend for 13 consecutive years. ResMed is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Risk and Volatility

ResMed has a beta of 0.77, suggesting that its share price is 23% less volatile than the S&P 500. Comparatively, Terumo has a beta of 0.82, suggesting that its share price is 18% less volatile than the S&P 500.

Summary

ResMed beats Terumo on 12 of the 18 factors compared between the two stocks.

About ResMed

ResMed is a medical technology company that develops products and software for people with sleep apnea, chronic obstructive pulmonary disease and other respiratory conditions. Its devices include continuous positive airway pressure (CPAP) and bilevel machines, ventilators and related masks and accessories. The company also provides cloud-connected software for managing sleep and respiratory care, along with digital tools used by home medical equipment providers and post-acute care organizations.

About Terumo

Terumo Corporation is a Japan-based medical technology company that develops and manufactures products for hospitals, clinics and other healthcare providers. Founded in 1921, the company began by producing clinical thermometers and has since expanded into a broad range of medical devices and services. Terumo’s businesses include cardiovascular and vascular products, such as catheter-based devices and systems used in the treatment of heart and vascular conditions; medical care products, including infusion and injection devices; and blood and cell technologies used to collect, process and manage blood and cellular therapies.