Critical Analysis: CompuMed (OTCMKTS:CMPD) & Zimmer Biomet (NYSE:ZBH)

Zimmer Biomet (NYSE:ZBH) and CompuMed (OTCMKTS:CMPD) are both medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, profitability, valuation, analyst recommendations, dividends, earnings and institutional ownership.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Zimmer Biomet and CompuMed, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Zimmer Biomet	3	11	7	1	2.27
CompuMed	0	0	0	0	0.00

Zimmer Biomet presently has a consensus target price of $106.20, suggesting a potential upside of 14.02%. Given Zimmer Biomet’s stronger consensus rating and higher possible upside, analysts plainly believe Zimmer Biomet is more favorable than CompuMed.

Risk & Volatility

Zimmer Biomet has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500. Comparatively, CompuMed has a beta of -0.49, indicating that its stock price is 149% less volatile than the S&P 500.

Profitability

This table compares Zimmer Biomet and CompuMed’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Zimmer Biomet	8.56%	12.93%	7.11%
CompuMed	-0.78%	-1.88%	-1.21%

Valuation and Earnings

This table compares Zimmer Biomet and CompuMed”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Zimmer Biomet	$8.23 billion	2.19	$705.20 million	$3.54	26.31
CompuMed	$7.55 million	1.13	-$60,000.00	($0.05)	-128.00

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

Insider and Institutional Ownership

88.9% of Zimmer Biomet shares are owned by institutional investors. 1.4% of Zimmer Biomet shares are owned by company insiders. Comparatively, 22.0% of CompuMed shares are owned by company 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.

Summary

Zimmer Biomet beats CompuMed on 14 of the 15 factors compared between the two stocks.

About Zimmer Biomet

Zimmer Biomet Holdings, Inc., together with its subsidiaries, operates as a medical technology company worldwide. The company designs, manufactures, and markets orthopedic reconstructive products, such as knee and hip products; S.E.T. products, including sports medicine, biologics, foot and ankle, extremities, and trauma products; craniomaxillofacial and thoracic products comprising face and skull reconstruction products, as well as products that fixate and stabilize the bones of the chest to facilitate healing or reconstruction after open heart surgery, trauma, or for deformities of the chest. It also offers robotic, surgical, and bone cement products. The company's products and solutions are used to treat patients suffering from disorders of, or injuries to, bones, joints, or supporting soft tissues. It serves orthopedic surgeons, neurosurgeons, hospitals, stocking distributors, healthcare dealers, and other specialists, as well as agents, healthcare purchasing organizations, or buying groups. The company was formerly known as Zimmer Holdings, Inc. and changed its name to Zimmer Biomet Holdings, Inc. in June 2015. Zimmer Biomet Holdings, Inc. was founded in 1927 and is headquartered in Warsaw, Indiana.

About CompuMed

CompuMed, Inc., an enterprise telemedicine solutions company, provides clinical care services for patients and medical facilities. It offers telecardiology and teleradiology services that provide real-time access to U.S. Board-Certified specialists through cloud-based technology and integrated medical devices to medical facilities worldwide. The company also provides enterprise telemedicine solutions; a suite of telecardiology services and diagnostic exam interpretations for pediatric and adult patients, including electrocardiogram (ECG) devices, echocardiogram, ECG, vascular, holter, nuclear, and video consults; and reading, transcription, reporting, storage, and video consultations in the areas of Vscan, X-ray, ultrasound, mammography, computed tomography, magnetic resonance imaging, and radiologist video consults. It also offers OsteoGram software that works in combination with standard or digital X-ray equipment to support osteoporosis screening, diagnosis, and therapy monitoring. In addition, the company provides mobile ECG and ultrasound solutions that provide patients with immediate access to its board-certified specialists; and medical devices. It serves organ procurement organizations, rural healthcare, and correctional healthcare industries. CompuMed, Inc. was founded in 1973 and is headquartered in Los Angeles, California.