STERIS (NYSE:STE) and Nihon Kohden (OTCMKTS:NHNKY) Financial Contrast

Nihon Kohden (OTCMKTS:NHNKY) and STERIS (NYSE:STE) are both medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, dividends, risk, earnings and valuation.

Institutional & Insider Ownership

0.1% of Nihon Kohden shares are owned by institutional investors. Comparatively, 94.7% of STERIS shares are owned by institutional investors. 1.1% of STERIS shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Nihon Kohden has a beta of 0.46, suggesting that its share price is 54% less volatile than the S&P 500. Comparatively, STERIS has a beta of 1.07, suggesting that its share price is 7% more volatile than the S&P 500.

Earnings and Valuation

This table compares Nihon Kohden and STERIS”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Nihon Kohden	$1.48 billion	1.07	$93.05 million	$0.51	18.16
STERIS	$5.46 billion	3.99	$614.64 million	$7.17	30.94

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

Analyst Ratings

This is a summary of recent recommendations and price targets for Nihon Kohden and STERIS, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Nihon Kohden	0	0	0	1	4.00
STERIS	0	2	5	0	2.71

STERIS has a consensus target price of $275.20, suggesting a potential upside of 24.04%. Given STERIS’s higher possible upside, analysts clearly believe STERIS is more favorable than Nihon Kohden.

Dividends

Nihon Kohden pays an annual dividend of $0.12 per share and has a dividend yield of 1.3%. STERIS pays an annual dividend of $2.52 per share and has a dividend yield of 1.1%. Nihon Kohden pays out 23.5% of its earnings in the form of a dividend. STERIS pays out 35.1% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. STERIS has increased its dividend for 20 consecutive years. Nihon Kohden is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Nihon Kohden	5.32%	7.25%	5.12%
STERIS	12.15%	14.34%	9.58%

Summary

STERIS beats Nihon Kohden on 14 of the 18 factors compared between the two stocks.

About Nihon Kohden

Nihon Kohden Corporation engages in development, manufacturing, sale, maintenance, and consultation of medical electronic equipment, and related systems and products in Japan, Americas, Europe, rest of Asia, and internationally. It offers physiological measuring equipment comprising electrocardiographs, electroencephalographs, and polygraphs for Cath-labs; patient monitoring systems, such as beside and central monitors; and treatment equipment including defibrillators, automated external defibrillators, ventilators, and pacemakers. The company also provides medical support system, which includes diagnostic and clinical information system; and in-vitro diagnostic equipment comprising hematology and clinical chemistry analyzers. In addition, it operates insurance brokerage and technology licensing business. The company was incorporated in 1951 and is headquartered in Shinjuku, Japan.

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.