Reviewing DexCom (NASDAQ:DXCM) and Pacific Biosciences of California (NASDAQ:PACB)

DexCom (NASDAQ:DXCM) and Pacific Biosciences of California (NASDAQ:PACB) are both medical companies, but which is the better stock? We will compare the two companies based on the strength of their dividends, earnings, analyst recommendations, risk, profitability, valuation and institutional ownership.

Risk and Volatility

DexCom has a beta of 1.55, suggesting that its stock price is 55% more volatile than the S&P 500. Comparatively, Pacific Biosciences of California has a beta of 2.33, suggesting that its stock price is 133% more volatile than the S&P 500.

Institutional & Insider Ownership

97.8% of DexCom shares are owned by institutional investors. 0.3% of DexCom shares are owned by insiders. Comparatively, 2.5% of Pacific Biosciences of California shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Profitability

This table compares DexCom and Pacific Biosciences of California’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
DexCom	17.94%	32.12%	11.86%
Pacific Biosciences of California	-341.47%	-326.43%	-19.40%

Analyst Recommendations

This is a summary of recent recommendations and price targets for DexCom and Pacific Biosciences of California, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
DexCom	1	3	18	2	2.88
Pacific Biosciences of California	2	1	2	1	2.33

DexCom presently has a consensus target price of $86.50, suggesting a potential upside of 39.02%. Pacific Biosciences of California has a consensus target price of $2.13, suggesting a potential upside of 58.58%. Given Pacific Biosciences of California’s higher possible upside, analysts clearly believe Pacific Biosciences of California is more favorable than DexCom.

Valuation & Earnings

This table compares DexCom and Pacific Biosciences of California”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
DexCom	$4.66 billion	5.14	$836.30 million	$2.10	29.63
Pacific Biosciences of California	$160.01 million	2.53	-$546.38 million	($1.84)	-0.73

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

Summary

DexCom beats Pacific Biosciences of California on 12 of the 15 factors compared between the two stocks.

About DexCom

DexCom, Inc., a medical device company, focuses on the design, development, and commercialization of continuous glucose monitoring (CGM) systems in the United States and internationally. The company provides its systems for use by people with diabetes, as well as for use by healthcare providers. Its products include Dexcom G6 and Dexcom G7, integrated CGM systems for diabetes management; Dexcom Share, a remote monitoring system; Dexcom Real-Time API, which enables authorized third-party software developers to integrate real-time CGM data into their digital health apps and devices; and Dexcom ONE, that is designed to replace finger stick blood glucose testing for diabetes treatment decisions. It has also submitted FDA review for Dexcom Stelo for people with type 2 diabetes. The company has a collaboration and license agreement with Verily Life Sciences LLC and Verily Ireland Limited to develop blood-based or interstitial glucose monitoring products. It markets its products directly to endocrinologists, physicians, and diabetes educators. The company was incorporated in 1999 and is headquartered in San Diego, California.

About Pacific Biosciences of California

Pacific Biosciences of California, Inc. designs, develops, and manufactures sequencing solution to resolve genetically complex problems. The company provides sequencing systems; consumable products, including single molecule real-time (SMRT) technology; long-red sequencing; and various reagent kits designed for specific workflow, such as preparation kit to convert DNA into SMRTbell double-stranded DNA library formats, including molecular biology reagents, such as ligase, buffers, and exonucleases. It also offers binding kits, such as modified DNA polymerase used to bind SMRTbell libraries to the polymerase in preparation for sequencing; and sequencing kits comprise reagents required for on-instrument, real-time sequencing, including the phospholinked nucleotides. In addition, it provides revio system + sequel systems which conduct, monitor, and analyze single-molecule biochemical reactions in real time; SBB short-read sequencing; onso instrument conducts, monitors, and analyzes SBB biochemical reactions; and SBB consumable, including flow cells, clustering, and sequencing reagent kits. The company serves academic and governmental research institutions; commercial testing and service laboratories; genome centers; public health labs, hospitals and clinical research institutes, and contract research organizations; pharmaceutical companies; and agricultural companies. It markets its products through a sales force and distribution partners in Asia, Australia, Europe, the Middle East, Africa, and Latin America. It has a development and commercialization agreement with Invitae Corporation; and a collaboration with Radboud University Medical to explore genetic causes of rare and genetic diseases. The company was formerly known as Nanofluidics, Inc. and changed its name to Pacific Biosciences of California, Inc. in 2005. Pacific Biosciences of California, Inc. was incorporated in 2000 and is headquartered in Menlo Park, California.