Head to Head Comparison: STAAR Surgical (NASDAQ:STAA) and McKesson (NYSE:MCK)

STAAR Surgical (NASDAQ:STAA) and McKesson (NYSE:MCK) are both medical companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, dividends, profitability, analyst recommendations, institutional ownership and risk.

Risk and Volatility

STAAR Surgical has a beta of 0.58, meaning that its share price is 42% less volatile than the S&P 500. Comparatively, McKesson has a beta of 0.48, meaning that its share price is 52% less volatile than the S&P 500.

Insider & Institutional Ownership

96.7% of STAAR Surgical shares are owned by institutional investors. Comparatively, 85.1% of McKesson shares are owned by institutional investors. 1.0% of STAAR Surgical shares are owned by insiders. Comparatively, 0.1% of McKesson shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares STAAR Surgical and McKesson”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
STAAR Surgical	$313.90 million	2.82	-$20.21 million	($1.44)	-12.40
McKesson	$359.05 billion	0.25	$3.30 billion	$25.83	27.85

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

Profitability

This table compares STAAR Surgical and McKesson’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
STAAR Surgical	-25.46%	-10.59%	-8.32%
McKesson	0.92%	-201.12%	5.83%

Analyst Ratings

This is a breakdown of current ratings for STAAR Surgical and McKesson, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
STAAR Surgical	1	9	1	0	2.00
McKesson	0	3	10	1	2.86

STAAR Surgical presently has a consensus price target of $24.63, suggesting a potential upside of 37.96%. McKesson has a consensus price target of $696.42, suggesting a potential downside of 3.18%. Given STAAR Surgical’s higher probable upside, equities analysts clearly believe STAAR Surgical is more favorable than McKesson.

Summary

McKesson beats STAAR Surgical on 9 of the 15 factors compared between the two stocks.

About STAAR Surgical

STAAR Surgical Company, together with its subsidiaries, designs, develops, manufactures, markets, and sells implantable lenses for the eye, and companion delivery systems to deliver the lenses into the eye. The company provides implantable Collamer lens product family (ICLs) to treat visual disorders, such as myopia, hyperopia, astigmatism, and presbyopia. It markets its products to health care providers, including ophthalmic surgeons, vision and surgical centers, hospitals, government facilities, and distributors, as well as products are primarily used by ophthalmologists. The company sells its products directly through its sales representatives in the United States, Japan, Germany, Spain, Canada, the United Kingdom, and Singapore, as well as through own representatives and independent distributors in China, Korea, India, France, Benelux, Italy, and internationally. STAAR Surgical Company was incorporated in 1982 and is headquartered in Lake Forest, California.

About McKesson

McKesson Corporation provides healthcare services in the United States and internationally. It operates through four segments: U.S. Pharmaceutical, Prescription Technology Solutions (RxTS), Medical-Surgical Solutions, and International. The U.S. Pharmaceutical segment distributes branded, generic, specialty, biosimilar and over-the-counter pharmaceutical drugs, and other healthcare-related products. This segment also offers practice management, technology, clinical support, and business solutions to community-based oncology and other specialty practices; and consulting, outsourcing, technological, and other services, as well as sells financial, operational, and clinical solutions to pharmacies. The RxTS segment serves biopharma and life sciences partners, and patients to address medication challenges for patients by working across healthcare; connects patients, pharmacies, providers, pharmacy benefit managers, health plans, and biopharma companies to deliver innovative solutions to help people get the medicine needed to live healthier lives; and provides prescription price transparency, benefit insight, dispensing support, third-party logistics, and wholesale distribution support services. The Medical-Surgical Solutions segment offers medical-surgical supply distribution, logistics, and other services to healthcare providers, including physician offices, surgery centers, nursing homes, hospital reference labs, and home health care agencies. The International segment provides distribution and services to wholesale, institutional, and retail customers in Europe and Canada. McKesson Corporation was founded in 1833 and is headquartered in Irving, Texas.