St Jude Medical (NYSE: STJ) and OBALON THERPTCS (NASDAQ:OBLN) are both healthcare companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, risk, valuation, profitability and institutional ownership.

Dividends

St Jude Medical pays an annual dividend of $1.24 per share and has a dividend yield of 1.5%. OBALON THERPTCS does not pay a dividend. St Jude Medical pays out 54.4% of its earnings in the form of a dividend. OBALON THERPTCS has raised its dividend for 6 consecutive years.

Profitability

This table compares St Jude Medical and OBALON THERPTCS’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
St Jude Medical 14.14% 19.40% 6.75%
OBALON THERPTCS -566.87% -108.07% -48.50%

Insider and Institutional Ownership

82.7% of St Jude Medical shares are held by institutional investors. Comparatively, 43.0% of OBALON THERPTCS shares are held by institutional investors. 4.8% of St Jude Medical shares are held by company insiders. Comparatively, 16.4% of OBALON THERPTCS shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Valuation & Earnings

This table compares St Jude Medical and OBALON THERPTCS’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
St Jude Medical N/A N/A N/A $2.28 35.45
OBALON THERPTCS $4.98 million 29.97 -$27.12 million ($6.90) -1.29

St Jude Medical has higher revenue, but lower earnings than OBALON THERPTCS. OBALON THERPTCS is trading at a lower price-to-earnings ratio than St Jude Medical, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of current ratings and recommmendations for St Jude Medical and OBALON THERPTCS, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
St Jude Medical 0 4 1 0 2.20
OBALON THERPTCS 1 0 3 0 2.50

St Jude Medical presently has a consensus price target of $77.25, indicating a potential downside of 4.42%. OBALON THERPTCS has a consensus price target of $15.25, indicating a potential upside of 71.93%. Given OBALON THERPTCS’s stronger consensus rating and higher possible upside, analysts plainly believe OBALON THERPTCS is more favorable than St Jude Medical.

Summary

OBALON THERPTCS beats St Jude Medical on 7 of the 13 factors compared between the two stocks.

St Jude Medical Company Profile

St. Jude Medical, Inc. is focused on the development, manufacture and distribution of cardiovascular medical devices for the global cardiac rhythm management, cardiovascular and atrial fibrillation therapy areas, and interventional pain therapy and neurostimulation devices for the management of chronic pain and movement disorders. The Company’s product categories include tachycardia implantable cardioverter defibrillator systems; atrial fibrillation products (electrophysiology introducers and catheters, advanced cardiac mapping, navigation and recording systems and ablation systems); bradycardia pacemaker systems; vascular products (vascular closure products, pressure measurement guidewires, optical coherence tomography imaging products, vascular plugs, heart failure monitoring devices and other vascular accessories); structural heart products (heart valve replacement and repair products and structural heart defect devices); neuromodulation products, and Thoratec products.

OBALON THERPTCS Company Profile

Obalon Therapeutics, Inc. is a United States-based commercial-stage medical device company focused on developing and commercializing medical devices to treat obese and overweight people by facilitating weight loss. The Company’s product, Obalon balloon system, is a swallowable, gas-filled intragastric balloon designed to provide weight loss in obese patients. The Obalon balloon system is intended to be used as an adjunct to a moderate intensity diet and behavior modification program. All balloons must be removed six months after the first balloon is placed. The Obalon balloon system intends to provide patients and physicians with a reversible and repeatable weight loss solution in an outpatient setting, without altering patient anatomy or requiring surgery. The Company has received Premarket approval (PMA) for its Obalon balloon system based on the results of its United States pivotal clinical trial, referred to as the SMART trial.

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