Contrasting Advanced Energy (AEIS) & Varex Imaging (VREX)

Varex Imaging (NASDAQ: VREX) and Advanced Energy (NASDAQ:AEIS) are both medical companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, valuation, analyst recommendations, dividends, risk and institutional ownership.

Profitability

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This table compares Varex Imaging and Advanced Energy’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Varex Imaging 7.24% 16.90% 6.58%
Advanced Energy 20.55% 35.06% 25.41%

Volatility & Risk

Varex Imaging has a beta of 2.47, meaning that its share price is 147% more volatile than the S&P 500. Comparatively, Advanced Energy has a beta of 1.31, meaning that its share price is 31% more volatile than the S&P 500.

Institutional and Insider Ownership

94.5% of Varex Imaging shares are owned by institutional investors. Comparatively, 94.4% of Advanced Energy shares are owned by institutional investors. 1.6% of Varex Imaging shares are owned by insiders. Comparatively, 1.2% of Advanced Energy 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.

Valuation & Earnings

This table compares Varex Imaging and Advanced Energy’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Varex Imaging $698.10 million 2.06 $51.60 million $1.80 21.20
Advanced Energy $671.01 million 3.90 $137.86 million $4.23 15.59

Advanced Energy has lower revenue, but higher earnings than Varex Imaging. Advanced Energy is trading at a lower price-to-earnings ratio than Varex Imaging, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Varex Imaging and Advanced Energy, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Varex Imaging 0 1 1 0 2.50
Advanced Energy 0 2 2 0 2.50

Varex Imaging presently has a consensus target price of $36.00, indicating a potential downside of 5.66%. Advanced Energy has a consensus target price of $90.33, indicating a potential upside of 36.97%. Given Advanced Energy’s higher possible upside, analysts clearly believe Advanced Energy is more favorable than Varex Imaging.

Summary

Advanced Energy beats Varex Imaging on 8 of the 13 factors compared between the two stocks.

Varex Imaging Company Profile

Varex Imaging Corporation designs and manufactures X-ray imaging components. The company operates in two segments, Medical and Industrial. The Medical segment designs, manufactures, sells, and services X-ray imaging components comprising X-ray tubes, digital flat panel image detectors, high voltage connectors, image-processing software and workstations, computer-aided diagnostic software, collimators, automatic exposure control devices, generators, ionization chambers, and buckys. This segment's products are used in a range of applications, including radiographic and fluoroscopic imaging, mammography, computed tomography, radiation therapy, and computer-aided detection. The Industrial segment designs, manufactures, sells, and services Linatron X-ray accelerators, X-ray tubes, digital flat panel detectors, high voltage connectors, and image-processing software for use in security and industrial inspection applications, such as airport security screening at ports and borders, as well as nondestructive examination in various applications. Varex Imaging Corporation sells its products through imaging system original equipment manufacturers, independent service companies, and distributors, as well as directly to end-users. The company has operations in North America, Latin America, Europe, Russia, the Middle East, India, Africa, Asia, and Australia. Varex Imaging Corporation is headquartered in Salt Lake City, Utah.

Advanced Energy Company Profile

Advanced Energy Industries, Inc., together with its subsidiaries, designs, manufactures, sells, and supports power conversion and control products that transform electrical power into various usable forms. It offers process power systems, including direct current (DC), pulsed DC, low frequency, high voltage, and radio frequency (RF) power supplies, as well as matching networks and remote plasma sources for reactive gas applications and RF instrumentation. The company also provides power control modules and thermal instrumentation products for rapid thermal processing, chemical vapor deposition, crystal growing, and other semiconductor and solar applications, as well as in chemical processing, glass manufacturing, and other general industrial power applications; and high voltage products for various applications, including semiconductor wafer processing and metrology, scientific instrumentation, mass spectrometry, industrial printing, and analytical x-ray systems for industrial and analytical applications. In addition, it offers repair services, conversions, upgrades, and refurbishments and used equipment to companies. The company markets and sells its products through direct sales force, independent sales representatives, and distributors in the North America, Europe, and Asia. Advanced Energy Industries, Inc. was founded in 1981 and is headquartered in Fort Collins, Colorado.

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