Contrasting Hill-Rom Holdings (HRC) & Zimmer Biomet Holdings (NYSE:ZBH)

Hill-Rom Holdings (NYSE: HRC) and Zimmer Biomet Holdings (NYSE:ZBH) are both mid-cap medical companies, but which is the superior business? We will compare the two businesses based on the strength of their risk, institutional ownership, analyst recommendations, dividends, valuation, earnings and profitability.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Hill-Rom Holdings and Zimmer Biomet Holdings, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hill-Rom Holdings 0 1 5 0 2.83
Zimmer Biomet Holdings 1 6 14 1 2.68

Hill-Rom Holdings currently has a consensus price target of $88.33, indicating a potential upside of 14.82%. Zimmer Biomet Holdings has a consensus price target of $135.40, indicating a potential upside of 20.67%. Given Zimmer Biomet Holdings’ higher probable upside, analysts clearly believe Zimmer Biomet Holdings is more favorable than Hill-Rom Holdings.

Risk & Volatility

Hill-Rom Holdings has a beta of 1.19, meaning that its share price is 19% more volatile than the S&P 500. Comparatively, Zimmer Biomet Holdings has a beta of 1.17, meaning that its share price is 17% more volatile than the S&P 500.

Profitability

This table compares Hill-Rom Holdings and Zimmer Biomet Holdings’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hill-Rom Holdings 4.87% 20.27% 5.87%
Zimmer Biomet Holdings 8.36% 16.29% 6.17%

Earnings and Valuation

This table compares Hill-Rom Holdings and Zimmer Biomet Holdings’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Hill-Rom Holdings $2.74 billion 1.85 $133.60 million $1.99 38.66
Zimmer Biomet Holdings $7.68 billion 2.96 $305.90 million $3.18 35.29

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

Insider and Institutional Ownership

82.1% of Hill-Rom Holdings shares are owned by institutional investors. Comparatively, 85.4% of Zimmer Biomet Holdings shares are owned by institutional investors. 2.2% of Hill-Rom Holdings shares are owned by company insiders. Comparatively, 1.1% of Zimmer Biomet Holdings shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

Hill-Rom Holdings pays an annual dividend of $0.72 per share and has a dividend yield of 0.9%. Zimmer Biomet Holdings pays an annual dividend of $0.96 per share and has a dividend yield of 0.9%. Hill-Rom Holdings pays out 36.2% of its earnings in the form of a dividend. Zimmer Biomet Holdings pays out 30.2% 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. Zimmer Biomet Holdings has increased its dividend for 6 consecutive years.

Summary

Zimmer Biomet Holdings beats Hill-Rom Holdings on 12 of the 18 factors compared between the two stocks.

About Hill-Rom Holdings

Hill-Rom Holdings, Inc. is a global medical technology company. The Company operates through four segments: North America Patient Support Systems, International Patient Support Systems, Front Line Care and Surgical Solutions. The Company’s products and services include Patient Support Systems, Front Line Care and Surgical Solutions. The Company sells and rents its specialty frames and surfaces, and mobility solutions, as well as its clinical workflow solutions, in the United States and Canada through its North America Patient Support Systems segment, and in regions outside of the United States and Canada through its International Patient Support Systems segment. Its Front Line Care segment globally sells and rents respiratory care products, and sells medical diagnostic equipment and a diversified portfolio of devices that assess, diagnose, treat and manage a range of illnesses and diseases. Under its Surgical Solutions segment, the Company sells its surgical products globally.

About Zimmer Biomet Holdings

Zimmer Biomet Holdings, Inc. is engaged in designing, manufacturing and marketing of orthopedic reconstructive products; sports medicine, biologics, extremities and trauma products; office-based technologies; spine, craniomaxillofacial and thoracic products; dental implants, and related surgical products. The Company’s products and solutions help treat patients suffering from disorders of, or injuries to, bones, joints or supporting soft tissues. The Company manages its operations through three geographic operating segments: the Americas, consisting principally of the United States and other North, Central and South American markets; EMEA, consisting principally of Europe and the Middle East and African markets, and Asia Pacific, consisting primarily of Japan and other Asian and Pacific markets. The Company’s product category segments include Americas Spine, Office Based Technologies, Craniomaxillofacial and Thoracic (CMF), and Dental.

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