NovoCure (NASDAQ:NVCR) & Medtronic (NYSE:MDT) Critical Survey

Medtronic (NYSE:MDT) and NovoCure (NASDAQ:NVCR) are both healthcare companies, but which is the superior business? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, risk, earnings, dividends and institutional ownership.

Analyst Ratings

This is a breakdown of current recommendations for Medtronic and NovoCure, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Medtronic	0	9	19	0	2.68
NovoCure	1	4	2	0	2.14

Medtronic presently has a consensus price target of $103.92, indicating a potential upside of 13.01%. NovoCure has a consensus price target of $21.20, indicating a potential upside of 27.60%. Given NovoCure’s higher probable upside, analysts clearly believe NovoCure is more favorable than Medtronic.

Profitability

This table compares Medtronic and NovoCure’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Medtronic	13.93%	14.78%	7.97%
NovoCure	-21.25%	-44.00%	-15.85%

Institutional and Insider Ownership

82.1% of Medtronic shares are held by institutional investors. Comparatively, 84.6% of NovoCure shares are held by institutional investors. 0.3% of Medtronic shares are held by company insiders. Comparatively, 6.6% of NovoCure shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares Medtronic and NovoCure”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Medtronic	$37.54 billion	3.13	$4.80 billion	$4.06	22.65
NovoCure	$699.19 million	2.77	-$136.23 million	($1.30)	-12.78

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

Volatility and Risk

Medtronic has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, NovoCure has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500.

Summary

Medtronic beats NovoCure on 10 of the 14 factors compared between the two stocks.

About Medtronic

Medtronic plc develops, manufactures, and sells device-based medical therapies to healthcare systems, physicians, clinicians, and patients worldwide. Its Cardiovascular Portfolio segment offers implantable cardiac pacemakers, cardioverter defibrillators, and cardiac resynchronization therapy devices; cardiac ablation products; insertable cardiac monitor systems; TYRX products; and remote monitoring and patient-centered software. It also provides aortic valves, surgical valve replacement and repair products, endovascular stent grafts and accessories, and transcatheter pulmonary valves; and percutaneous coronary intervention products, percutaneous angioplasty balloons, and products. The company's Medical Surgical Portfolio segment offers surgical stapling devices, vessel sealing instruments, wound closure, electrosurgery products, surgical artificial intelligence and robotic-assisted surgery products, hernia mechanical devices, mesh implants, gynecology and lung products, and various therapies to treat diseases, as well as products in the fields of minimally invasive gastrointestinal and hepatologic diagnostics and therapies, patient monitoring, airway management and ventilation therapies, and renal disease. Its Neuroscience Portfolio segment offers products for spinal surgeons; neurosurgeons; neurologists; pain management specialists; anesthesiologists; orthopedic surgeons; urologists; urogynecologists; interventional radiologists; ear, nose, and throat specialists; and systems that incorporate energy surgical instruments. It also provides image-guided surgery and intra-operative imaging systems and robotic guidance systems used in robot assisted spine procedures; and therapies for vasculature in and around the brain. The company's Diabetes Operating Unit segment offers insulin pumps and consumables, continuous glucose monitoring systems, smart insulin pen systems, and consumables and supplies. The company was founded in 1949 and is headquartered in Dublin, Ireland.

About NovoCure

NovoCure Limited, an oncology company, engages in the development, manufacture, and commercialization of tumor treating fields (TTFields) devices for the treatment of solid tumor cancers in the United States, Germany, Japan, Greater China, and internationally. The company’s TTFields devices include Optune Gio and Optune Lua. It also has ongoing clinical trials investigating TTFields in brain metastases, gastric cancer, glioblastoma, liver cancer, non-small cell lung cancer, pancreatic cancer, and ovarian cancer. NovoCure Limited was incorporated in 2000 and is headquartered in Saint Helier, Jersey.