Contrasting K2M Group (KTWO) and Haemonetics (NYSE:HAE)

Haemonetics (NYSE: HAE) and K2M Group (NASDAQ:KTWO) are both medical companies, but which is the better business? We will compare the two companies based on the strength of their earnings, valuation, risk, institutional ownership, dividends, profitability and analyst recommendations.

Profitability

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This table compares Haemonetics and K2M Group’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Haemonetics -1.94% 12.39% 7.66%
K2M Group -14.40% -14.85% -9.82%

Institutional & Insider Ownership

99.3% of K2M Group shares are owned by institutional investors. 1.2% of Haemonetics shares are owned by company insiders. Comparatively, 5.8% of K2M Group shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Haemonetics and K2M Group, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Haemonetics 0 2 4 0 2.67
K2M Group 0 1 8 0 2.89

Haemonetics currently has a consensus target price of $70.00, indicating a potential downside of 2.99%. K2M Group has a consensus target price of $24.50, indicating a potential upside of 31.93%. Given K2M Group’s stronger consensus rating and higher probable upside, analysts clearly believe K2M Group is more favorable than Haemonetics.

Valuation & Earnings

This table compares Haemonetics and K2M Group’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Haemonetics $886.12 million 4.35 -$26.26 million $1.53 47.16
K2M Group $258.03 million 3.12 -$37.14 million ($0.87) -21.34

Haemonetics has higher revenue and earnings than K2M Group. K2M Group is trading at a lower price-to-earnings ratio than Haemonetics, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Haemonetics has a beta of 0.89, suggesting that its stock price is 11% less volatile than the S&P 500. Comparatively, K2M Group has a beta of 1.47, suggesting that its stock price is 47% more volatile than the S&P 500.

Summary

Haemonetics beats K2M Group on 8 of the 14 factors compared between the two stocks.

Haemonetics Company Profile

Haemonetics Corporation (Haemonetics) is a healthcare company. The Company provides various products to customers involved in the processing, handling and analysis of blood. The Company’s segments include Japan, EMEA, North America Plasma and All Other. Haemonetics provides plasma collection systems and software, which enable plasma fractionators to make pharmaceuticals. The Company enables plasma collection customers to source from it a range of products necessary for plasma collection and storage, including PCS brand plasma collection equipment and disposables, plasma collection containers and intravenous solutions, such as saline. Haemonetics offers automated blood component and manual whole blood collection systems to blood collection centers to collect blood products. The Company offers a range of blood management solutions. The Company has a suite of integrated software solutions, which include solutions for blood drive planning and blood collection.

K2M Group Company Profile

K2M Group Holdings, Inc. is a medical device company focused on designing, developing and commercializing spine and minimally invasive technologies and techniques. The Company’s solutions are focused on achieving three-dimensional Total Body Balance. Its spine products are used by spine surgeons to treat spinal pathologies, such as deformity (primarily scoliosis), trauma and tumor. Its products consist of implants, disposables and instruments, which are marketed and sold primarily to hospitals for use by spine surgeons. As of December 31, 2016, its product portfolio consisted of 83 product lines that are used in complex spine, minimally invasive surgery (MIS) and degenerative surgeries. Its technologies include EVEREST, MESA, Rail 4D, Quicket Deformity, CASCADIA, CAPRI, SERENGETI, RAVINE and tifix. Its degenerative spine technologies are used to treat degenerative spine disorders and include products, such as cervical, thoracic and lumbar spinal fusion devices and interbody devices.

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