Head-To-Head Review: Digirad (DRAD) & Fonar (FONR)

Fonar (NASDAQ:FONR) and Digirad (NASDAQ:DRAD) are both small-cap medical companies, but which is the better investment? We will contrast the two companies based on the strength of their institutional ownership, risk, analyst recommendations, profitability, dividends, valuation and earnings.

Profitability

This table compares Fonar and Digirad’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fonar 22.55% 18.40% 16.18%
Digirad 0.71% -9.83% -5.00%

Analyst Recommendations

This is a summary of current recommendations for Fonar and Digirad, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fonar 0 0 0 0 N/A
Digirad 0 0 0 0 N/A

Insider and Institutional Ownership

51.0% of Fonar shares are owned by institutional investors. Comparatively, 38.7% of Digirad shares are owned by institutional investors. 3.0% of Fonar shares are owned by company insiders. Comparatively, 7.3% of Digirad shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Fonar and Digirad’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fonar $81.52 million 1.51 $21.23 million N/A N/A
Digirad $104.18 million 0.13 $740,000.00 N/A N/A

Fonar has higher earnings, but lower revenue than Digirad.

Dividends

Digirad pays an annual dividend of $0.11 per share and has a dividend yield of 16.1%. Fonar does not pay a dividend. Digirad has raised its dividend for 2 consecutive years.

Risk and Volatility

Fonar has a beta of 0.83, meaning that its share price is 17% less volatile than the S&P 500. Comparatively, Digirad has a beta of 2.51, meaning that its share price is 151% more volatile than the S&P 500.

Summary

Fonar beats Digirad on 6 of the 11 factors compared between the two stocks.

Fonar Company Profile

FONAR Corporation, together with its subsidiaries, operates as a magnetic resonance imaging (MRI) company primarily in the Unites States. It is involved in the research, development, production, and marketing of medical scanning equipment, which uses principles of MRI for the detection and diagnosis of human diseases, abnormalities, other medical conditions, and injuries. The company operates in two segments, Manufacturing and Servicing of Medical Equipment, and Management of Diagnostic Imaging Centers. It provides Upright MRI scanner that allows patients to be scanned in weight-bearing conditions, such as standing, sitting, bending, or lying down. The company markets its scanners to private diagnostic imaging centers and hospitals. It also provides non-medical management services, including development, administration, office space leasing, facilities, equipment, supplies, staffing, credentialing, accounting, billing and collection, assistance with compliance matters, and practice growth and marketing strategies development and implementation services, as well as engages in the training and supervision of non-medical personnel for diagnostic imaging facilities. The company also exports its products to the United Arab Emirates, Switzerland, Canada, England, Germany, and Puerto Rico. It owns and operates 4 diagnostic imaging facilities in Florida; and manages 26 MRI scanning facilities, including 19 facilities located in New York and 7 situated in Florida. The company was founded in 1978 and is based in Melville, New York.

Digirad Company Profile

Digirad Corporation provides healthcare solutions in the United States. It operates through Diagnostic Services, Mobile Healthcare, and Diagnostic Imaging segments. The Diagnostic Services segment provides nuclear and ultrasound imaging services to physicians who perform nuclear imaging, echocardiography, vascular or general ultrasound tests, imaging systems, radiopharmaceuticals, and licensing services, as well as offers remote cardiac event monitoring services. The Mobile Healthcare segment offers contract diagnostic imaging services, including computerized tomography (CT), magnetic resonance imaging (MRI), positron emission tomography (PET), PET/CT, and nuclear medicine and healthcare services to hospitals, integrated delivery networks, and federal institutions on a long-term contract basis, as well as provisional services to institutions that are in transition. The Diagnostic Imaging segment develops and sells gamma camera imaging systems, such as nuclear cardiac imaging systems and general purpose nuclear imaging systems to physician offices and hospitals; and offers camera maintenance services. Digirad Corporation was founded in 1985 and is headquartered in Suwanee, Georgia.

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