LivaNova (LIVN) versus Steris (STE) Critical Comparison

LivaNova (NASDAQ: LIVN) and Steris (NYSE:STE) are both mid-cap medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, institutional ownership, risk, analyst recommendations and valuation.

Profitability

This table compares LivaNova and Steris’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
LivaNova 4.63% 9.33% 6.82%
Steris 9.42% 11.57% 6.80%

Dividends

Steris pays an annual dividend of $1.24 per share and has a dividend yield of 1.4%. LivaNova does not pay a dividend. Steris pays out 43.5% of its earnings in the form of a dividend. LivaNova has increased its dividend for 8 consecutive years.

Insider & Institutional Ownership

88.5% of LivaNova shares are owned by institutional investors. Comparatively, 89.5% of Steris shares are owned by institutional investors. 0.3% of LivaNova shares are owned by insiders. Comparatively, 2.6% of Steris shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares LivaNova and Steris’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
LivaNova $1.21 billion 3.41 -$62.78 million $1.17 73.38
Steris $2.61 billion 2.93 $109.96 million $2.85 31.62

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

Volatility and Risk

LivaNova has a beta of 0.83, indicating that its stock price is 17% less volatile than the S&P 500. Comparatively, Steris has a beta of 1.22, indicating that its stock price is 22% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for LivaNova and Steris, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
LivaNova 1 2 4 0 2.43
Steris 0 2 3 0 2.60

LivaNova presently has a consensus target price of $78.17, suggesting a potential downside of 8.95%. Steris has a consensus target price of $80.25, suggesting a potential downside of 10.94%. Given LivaNova’s higher probable upside, analysts plainly believe LivaNova is more favorable than Steris.

Summary

Steris beats LivaNova on 10 of the 17 factors compared between the two stocks.

About LivaNova

LivaNova PLC is a medical device company focused on the development and delivery of therapeutic solutions. The Company’s segments include Cardiac Surgery, Cardiac Rhythm Management, Neuromodulation and Other. The Cardiac Surgery segment is engaged in the development, production and sale of cardiovascular surgery products. Cardiac Surgery products include oxygenators, heart-lung machines, autotransfusion, mechanical heart valves and tissue heart valves. The Cardiac Rhythm Management segment is engaged in the development, manufacturing and marketing of products for the diagnosis, treatment, and management of heart rhythm disorders and heart failure. Cardiac Rhythm Management products include high-voltage defibrillators Cardiac Resynchronization Therapy device (CRT-D) and low-voltage pacemakers. The Neuromodulation segment is engaged in the design, development and marketing of neuromodulation therapy for the treatment of drug-resistant epilepsy and treatment resistant depression.

About Steris

STERIS plc provides infection prevention and other procedural products and services. The Company operates through four segments: Healthcare Products, which offers infection prevention and procedural solutions for healthcare providers, including capital equipment and related maintenance, and installation services, as well as consumables; Healthcare Specialty Services, which provides a range of specialty services for healthcare providers, including hospital sterilization services, instrument and scope repairs, and linen management; Life Sciences, which offers capital equipment and consumable products, and equipment maintenance and specialty services for pharmaceutical manufacturers and research facilities, and Applied Sterilization Technologies, which offers contract sterilization and laboratory services for medical device and pharmaceutical customers and others. Its Corporate and other segment includes the Defense and Industrial business unit.

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