Analyzing Derma Sciences (DSCI) and ResMed (NYSE:RMD)

Derma Sciences (NASDAQ: DSCI) and ResMed (NYSE:RMD) are both healthcare companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, valuation, profitability, institutional ownership and earnings.

Dividends

ResMed pays an annual dividend of $1.40 per share and has a dividend yield of 1.6%. Derma Sciences does not pay a dividend. ResMed pays out 56.7% of its earnings in the form of a dividend. Derma Sciences has increased its dividend for 2 consecutive years.

Insider & Institutional Ownership

58.9% of Derma Sciences shares are held by institutional investors. Comparatively, 61.9% of ResMed shares are held by institutional investors. 9.9% of Derma Sciences shares are held by company insiders. Comparatively, 1.8% of ResMed shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Derma Sciences and ResMed’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Derma Sciences N/A N/A N/A ($0.31) N/A
ResMed $2.07 billion 6.03 $342.28 million $2.47 35.54

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

Profitability

This table compares Derma Sciences and ResMed’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Derma Sciences -20.97% -17.10% -12.43%
ResMed 16.58% 21.53% 11.90%

Analyst Recommendations

This is a breakdown of current ratings for Derma Sciences and ResMed, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Derma Sciences 0 1 0 0 2.00
ResMed 4 4 3 0 1.91

ResMed has a consensus target price of $65.83, indicating a potential downside of 25.00%.

Summary

ResMed beats Derma Sciences on 9 of the 13 factors compared between the two stocks.

Derma Sciences Company Profile

Derma Sciences, Inc. (Derma Sciences) is a medical device company. The Company operates through two segments: advanced wound care and traditional wound care products. Advanced wound care products principally consist of both novel and otherwise differentiated dressings, devices and skin substitutes designed to promote wound healing and/or prevent infection. The Company’s advanced wound care product line consists of MEDIHONEY, TCC-EZ, AMNIOEXCEL and AMNIOMATRIX, XTRASORB and BIOGUARD. Traditional wound care products principally consist of commodity related dressings, ointments, gauze bandages, adhesive bandages, wound closure strips, catheter fasteners and skin care products. The Company’s traditional wound care product line includes branded gauze sponges and bandages, non-adherent impregnated dressings, retention devices, paste bandages and other compression devices for the medical markets.

ResMed Company Profile

ResMed Inc. is a holding company. The Company is engaged in the development, manufacturing, distribution and marketing of medical devices and cloud-based software applications that diagnose, treat and manage respiratory disorders, including sleep disordered breathing (SDB), chronic obstructive pulmonary disease (COPD), neuromuscular disease and other diseases. SDB includes obstructive sleep apnea (OSA) and other respiratory disorders that occur during sleep. Its cloud-based software digital health applications, along with its devices, are designed to provide connected care to improve patient outcomes. The Company’s portfolio of products includes devices, diagnostic products, mask systems, headgear and other accessories, dental devices, portable oxygen concentrators (POCs) and cloud-based software informatics solutions. The Company produces Continuous Positive Airway Pressure (CPAP), Variable Positive Airway Pressure (VPAP) and AutoSet systems for the titration and treatment of SDB.

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