iRadimed (NASDAQ:IRMD) and Terumo (OTCMKTS:TRUMY) Critical Analysis

Terumo (OTCMKTS:TRUMY) and iRadimed (NASDAQ:IRMD) are both healthcare companies, but which is the superior investment? We will compare the two companies based on the strength of their dividends, risk, profitability, earnings, analyst recommendations, institutional ownership and valuation.

Dividends

Terumo pays an annual dividend of $0.06 per share and has a dividend yield of 0.4%. iRadimed pays an annual dividend of $0.80 per share and has a dividend yield of 0.9%. Terumo pays out 8.5% of its earnings in the form of a dividend. iRadimed pays out 42.8% 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. iRadimed has raised its dividend for 1 consecutive years. iRadimed is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a summary of current ratings and price targets for Terumo and iRadimed, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Terumo	0	0	0	2	4.00
iRadimed	0	1	3	1	3.00

iRadimed has a consensus target price of $120.00, suggesting a potential upside of 36.31%. Given iRadimed’s higher possible upside, analysts clearly believe iRadimed is more favorable than Terumo.

Volatility and Risk

Terumo has a beta of 0.82, indicating that its share price is 18% less volatile than the S&P 500. Comparatively, iRadimed has a beta of 0.91, indicating that its share price is 9% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Terumo	13.83%	10.44%	7.34%
iRadimed	26.85%	23.90%	20.89%

Earnings & Valuation

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

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Terumo	$7.52 billion	2.95	$897.03 million	$0.71	21.21
iRadimed	$83.81 million	13.43	$22.48 million	$1.87	47.08

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

Insider and Institutional Ownership

92.3% of iRadimed shares are held by institutional investors. 34.6% of iRadimed shares are held 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.

Summary

iRadimed beats Terumo on 13 of the 18 factors compared between the two stocks.

About Terumo

Terumo Corporation engages in the manufacture and sale of medical products and equipment in Japan, Europe, China, the United States, Asia, and internationally. The company operates through three segments: Cardiac and Vascular Company, Medical Care Solutions Company, and Blood and Cell Technologies Company. The Cardiac and Vascular Company segment offers angiographic guidewires, angiographic catheters, introducer sheaths, vascular closure devices, PTCA balloon catheters, coronary stents, self-expanding peripheral stents, intravascular ultrasound systems, imaging catheters, and others; coils, stents, and intrasaccular devices for treating cerebral aneurysm; embolization systems, aspiration catheters, and clot retrievers for treating ischemic stroke and others; oxygenators, cardio-pulmonary bypass systems, and others; and artificial vascular and stent grafts. The Medical Care Solutions Company segment provides syringes, infusion pumps, syringe pumps, infusion lines, I.V. solutions, peritoneal dialysis fluids, pain management and nutritious food products, adhesion barriers, and others; blood glucose monitoring systems, disposable needles for pen-injector, insulin patch pumps, blood pressure monitors, digital thermometers, and others; and contract manufacturing of prefilled syringes, devices to pharmaceutical companies for use in drug kits, such as prefillable syringes, needles for pharmaceutical packaging business, and others. The Blood and Cell Technologies Company segment offers blood bags, component collection systems, automated blood processing systems, pathogen reduction systems, centrifugal apheresis systems, cell expansion systems, and others. The company was formerly known as Sekisen Ken-onki Corporation and changed its name to Terumo Corporation in October 1974. Terumo Corporation was incorporated in 1921 and is headquartered in Tokyo, Japan.

About iRadimed

IRadimed Corp. engages in the development, manufacture, marketing, and distribution of Magnetic Resonance Imaging compatible medical devices. It also provides a non-magnetic Intravenous infusion pump system that is specifically designed for use during MRI procedures. The company was founded by Roger Susi in July 1992 and is headquartered in Winter Springs, FL.