Financial Analysis: Globus Medical (GMED) versus Teleflex (TFX)

Globus Medical (NYSE:GMED) and Teleflex (NYSE:TFX) are both medical companies, but which is the better investment? We will contrast the two companies based on the strength of their dividends, risk, earnings, valuation, analyst recommendations, institutional ownership and profitability.

Insider & Institutional Ownership

68.7% of Globus Medical shares are owned by institutional investors. Comparatively, 91.2% of Teleflex shares are owned by institutional investors. 25.0% of Globus Medical shares are owned by company insiders. Comparatively, 2.4% of Teleflex shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Earnings & Valuation

This table compares Globus Medical and Teleflex’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Globus Medical $712.97 million 5.91 $156.47 million $1.67 25.51
Teleflex $2.45 billion 5.58 $200.80 million $9.90 29.90

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

Dividends

Teleflex pays an annual dividend of $1.36 per share and has a dividend yield of 0.5%. Globus Medical does not pay a dividend. Teleflex pays out 13.7% of its earnings in the form of a dividend.

Risk and Volatility

Globus Medical has a beta of 0.79, indicating that its stock price is 21% less volatile than the S&P 500. Comparatively, Teleflex has a beta of 1.01, indicating that its stock price is 1% more volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations for Globus Medical and Teleflex, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Globus Medical 1 2 6 0 2.56
Teleflex 0 1 5 1 3.00

Globus Medical presently has a consensus price target of $56.89, suggesting a potential upside of 33.54%. Teleflex has a consensus price target of $324.86, suggesting a potential upside of 9.75%. Given Globus Medical’s higher probable upside, equities analysts plainly believe Globus Medical is more favorable than Teleflex.

Profitability

This table compares Globus Medical and Teleflex’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Globus Medical 20.81% 14.09% 12.95%
Teleflex 7.50% 18.62% 7.51%

Summary

Teleflex beats Globus Medical on 10 of the 17 factors compared between the two stocks.

About Globus Medical

Globus Medical, Inc., a medical device company, focuses on the design, development, and commercialization of musculoskeletal implants that promote healing in patients with spine disorders. The company offers products that address a variety of musculoskeletal pathologies, anatomies, and surgical approaches. Its spine product portfolio includes a range of implant and surgical approach options that could be used to treat degenerative, deformity, tumor, and trauma conditions affecting the spine from the occiput to the sacrum. The company also offers imaging, navigation, and robotic assisted surgery technology solutions, as well as motion preservation technologies, such as dynamic stabilization, total disc replacement and interspinous distraction devices, and interventional pain management solutions to treat vertebral compression fractures. In addition, it provides regenerative biologic products, such as allografts and synthetic alternatives that are adjunctive treatments used in combination with stabilizing implant hardware. Further, the company offers products for the treatment of orthopedic trauma, including fracture plates, compression screws, intramedullary nails, and external fixation systems. Additionally, it distributes human cell, tissue, and cellular and tissue based products. The company sells its implants and related disposables primarily to hospitals through direct sales representatives and independent distributors in the United States and internationally. Globus Medical, Inc. was founded in 2003 and is headquartered in Audubon, Pennsylvania.

About Teleflex

Teleflex Incorporated designs, develops, manufactures, and supplies single-use medical devices for common diagnostic and therapeutic procedures in critical care and surgical applications worldwide. It offers vascular access products that comprise Arrow branded catheters and related devices, including catheter positioning systems for use in the administration of intravenous medications and other therapies, the measurement of blood pressure, and the withdrawal of blood samples through a single puncture site; and devices for treating coronary and peripheral vascular disease. The company also provides interventional access products that are used in dialysis, oncology, and critical care therapies; and cardiac care products, such as diagnostic and intra-aortic balloon catheters, and capital equipment. In addition, it offers anesthesia products, such as pain management products for use in surgical and obstetric procedures; airway management products and related devices for use in pre-hospital emergency and hospital settings; and other pre-hospital emergency products. Further, the company offers surgical products, including Weck Ligation Systems, Weck EFx Fascial Closure Systems, Percutaneous Surgical Systems, Weck Vista bladeless access ports, Deknatel sutures, and Pilling and Kmedic surgical instruments; products for use in acute care settings for diagnostic and therapeutic procedures, and in general and specialty surgical applications; and single-use respiratory, urology, and interventional urology products. Additionally, it provides devices and instruments for other medical device manufacturers, such as custom-engineered extrusions, diagnostic and interventional catheters, balloon sheath/dilator sets and kits, sutures, performance fibers, and bioresorbable resins and fibers. The company serves hospitals and healthcare providers, medical device manufacturers, and home care markets. Teleflex Incorporated was founded in 1943 and is headquartered in Wayne, Pennsylvania.

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