Abaxis (NASDAQ: ABAX) and GenMark Diagnostics (NASDAQ:GNMK) are both small-cap medical companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, profitability, dividends, analyst recommendations, risk, valuation and institutional ownership.

Dividends

Abaxis pays an annual dividend of $0.64 per share and has a dividend yield of 1.3%. GenMark Diagnostics does not pay a dividend. Abaxis pays out 53.3% of its earnings in the form of a dividend.

Risk and Volatility

Abaxis has a beta of 0.86, meaning that its stock price is 14% less volatile than the S&P 500. Comparatively, GenMark Diagnostics has a beta of 0.66, meaning that its stock price is 34% less volatile than the S&P 500.

Valuation and Earnings

This table compares Abaxis and GenMark Diagnostics’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Abaxis $227.22 million 4.80 $32.71 million $1.20 40.03
GenMark Diagnostics $49.27 million 4.72 -$50.60 million ($1.22) -3.48

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

Profitability

This table compares Abaxis and GenMark Diagnostics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Abaxis 11.98% 10.18% 8.84%
GenMark Diagnostics -116.76% -100.33% -57.22%

Analyst Ratings

This is a breakdown of current ratings and recommmendations for Abaxis and GenMark Diagnostics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Abaxis 1 3 1 0 2.00
GenMark Diagnostics 0 1 5 0 2.83

Abaxis currently has a consensus target price of $47.63, indicating a potential downside of 0.86%. GenMark Diagnostics has a consensus target price of $11.80, indicating a potential upside of 178.30%. Given GenMark Diagnostics’ stronger consensus rating and higher possible upside, analysts clearly believe GenMark Diagnostics is more favorable than Abaxis.

Insider & Institutional Ownership

97.7% of Abaxis shares are owned by institutional investors. 4.3% of Abaxis shares are owned by company insiders. Comparatively, 7.5% of GenMark Diagnostics shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Summary

Abaxis beats GenMark Diagnostics on 10 of the 15 factors compared between the two stocks.

Abaxis Company Profile

Abaxis, Inc. is a developer, manufacturer and marketer of portable blood analysis systems that are used in medical specialties in human or veterinary patient care to provide clinicians with blood constituent measurements. The Company markets and sells its products around the world through independent distributors and direct sales force. The Company’s segments are the medical market and the veterinary market. The Company’s medical market products include Piccolo chemistry analyzers and consumable products. The Company develops, manufactures and sells the Piccolo Xpress chemistry analyzer for use in human patient care to provide clinicians with blood constituent measurements. The Company’s veterinary market product offerings include VetScan chemistry analyzers and veterinary reagent discs, VetScan hematology instruments and related reagent kits, VetScan VSpro specialty analyzers and related consumables, VetScan i-STAT analyzers and related consumables and VetScan rapid tests.

GenMark Diagnostics Company Profile

GenMark Diagnostics, Inc. is a molecular diagnostics company. The Company is focused on developing and commercializing multiplex molecular tests that aid in the diagnosis of complex medical conditions. It develops and commercializes multiplex molecular tests based on its eSensor electrochemical detection technology. It offers four Food and Drug Administration (FDA)-cleared diagnostic tests which run on its XT-8 instrument; its Respiratory Viral Panel; its Cystic Fibrosis Genotyping Test; its Warfarin Sensitivity Test, and its Thrombophilia Risk Test. It also offers a Hepatitis C (HCV) genotyping test and associated custom manufactured reagents, as well as a 2C19 Genotyping Test, versions of which are available for use with its XT-8 instrument for research use only (RUO). Its XT-8 and ePlex test cartridges utilize the combination of distinct electrodes and multiple signal probes to detect dozens of target biomarkers from a single sample, thereby enabling highly multiplexed testing.

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