Critical Survey: STERIS (NYSE:STE) vs. Elekta (OTCMKTS:EKTAY)

STERIS (NYSE:STE) and Elekta (OTCMKTS:EKTAY) are both medical companies, but which is the better business? We will compare the two companies based on the strength of their institutional ownership, earnings, valuation, analyst recommendations, risk, dividends and profitability.

Insider and Institutional Ownership

94.7% of STERIS shares are owned by institutional investors. 1.1% of STERIS shares are owned by insiders. Comparatively, 41.3% of Elekta shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

STERIS pays an annual dividend of $2.52 per share and has a dividend yield of 1.0%. Elekta pays an annual dividend of $0.13 per share and has a dividend yield of 2.5%. STERIS pays out 38.6% of its earnings in the form of a dividend. Elekta pays out 216.7% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. STERIS has raised its dividend for 20 consecutive years.

Valuation & Earnings

This table compares STERIS and Elekta”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
STERIS	$5.46 billion	4.34	$614.64 million	$6.53	36.84
Elekta	$1.71 billion	1.13	$22.37 million	$0.06	87.00

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

Risk & Volatility

STERIS has a beta of 1.01, suggesting that its share price is 1% more volatile than the S&P 500. Comparatively, Elekta has a beta of 1.12, suggesting that its share price is 12% more volatile than the S&P 500.

Profitability

This table compares STERIS and Elekta’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
STERIS	11.61%	14.17%	9.25%
Elekta	1.40%	11.49%	3.65%

Analyst Ratings

This is a breakdown of current ratings for STERIS and Elekta, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
STERIS	0	2	7	0	2.78
Elekta	1	3	0	0	1.75

STERIS presently has a consensus price target of $273.50, indicating a potential upside of 13.68%. Given STERIS’s stronger consensus rating and higher probable upside, equities research analysts clearly believe STERIS is more favorable than Elekta.

Summary

STERIS beats Elekta on 13 of the 17 factors compared between the two stocks.

About STERIS

STERIS plc provides infection prevention products and services worldwide. It operates through four segments: Healthcare, Applied Sterilization Technologies, Life Sciences, and Dental. The Healthcare segment offers cleaning chemistries and sterility assurance products; automated endoscope reprocessing system and tracking products; endoscopy accessories, washers, sterilizers, and other pieces of capital equipment for the operation of a sterile processing department; and equipment used directly in the operating room, including surgical tables, lights, and connectivity solutions, as well as equipment management services. It also provides capital equipment installation, maintenance, upgradation, repair, and troubleshooting services; preventive maintenance programs and repair services; instrument and endoscope repair and maintenance services; and custom process improvement consulting and outsourced instrument sterile processing services. The Applied Sterilization Technologies segment provides contract sterilization and testing services for medical device and pharmaceutical manufacturers through a network of approximately 50 contract sterilization and laboratory facilities. The Life Sciences segment designs, manufactures and sells consumable products, such as formulated cleaning chemistries, barrier, sterility assurance products, steam and vaporized hydrogen peroxide sterilizers, and washer disinfectors. This segment also offers equipment installation, maintenance, upgradation, repair, and troubleshooting services; and preventive maintenance programs and repair services. The Dental segment provides hand and electric-powered dental instruments, infection control products, conscious sedation, personal protective equipment, and water quality products for dental suite. The company serves its products and services to hospitals, other healthcare providers, and pharmaceutical manufacturers. The company was founded in 1985 and is based in Dublin, Ireland.

About Elekta

Elekta AB (publ), a medical technology company, provides clinical solutions for treating cancer and brain disorders worldwide. The company offers Versa HD, a brain metastases solution; Elekta Unity for real-time MR visualization; Elekta Harmony, a linear accelerator; Elekta Infinity for treating a range of patients with simple-to-complex radiotherapy needs; Elekta Synergy, a digital accelerator for image guided radiation therapy; treatment and workflow management solutions; radiation and medical oncology; and other patient services. It also provides Elekta Studio, an image guided brachytherapy solution; ImagingRing, a mobile CT scanner; Oncentra Brachy, a smart tool that facilitate repetitive tasks; Venezia applicator that enables the oncologist to treat locally advanced cervical cancer; Elekta Flexitron afterloader for enabling the precise execution of all steps in the workflow; Geneva, an applicator for cervical cancer treatment; veterinary radiation therapy products; and Elekta Kaiku for personalized cancer care. In addition, the company offers stereotactic radiosurgery, such as Leksell Gamma Knife Icon for personalized radiation treatment; Leksell Gamma Knife Perfexion, a tool for radiosurgeons; and Elekta Esprit. Further, it provides neurosurgery products comprising Leksell Vantage Stereotactic System for intracranial neurosurgery; and Leksell Stereotactic System for minimally invasive stereotactic neurosurgery. The company was incorporated in 1972 and is headquartered in Stockholm, Sweden.