Profound Medical (NASDAQ:PROF) versus Westaim (OTCMKTS:WEDXF) Critical Contrast

Westaim (OTCMKTS:WEDXF) and Profound Medical (NASDAQ:PROF) are both small-cap basic materials companies, but which is the superior business? We will compare the two businesses based on the strength of their dividends, analyst recommendations, earnings, risk, valuation, profitability and institutional ownership.

Insider & Institutional Ownership

47.9% of Profound Medical shares are owned by institutional investors. 4.2% of Westaim shares are owned by insiders. Comparatively, 1.5% of Profound Medical shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Westaim and Profound Medical”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Westaim	$8.63 million	52.21	$183.98 million	$0.29	12.12
Profound Medical	$8.98 million	23.60	-$28.57 million	($1.34)	-5.27

Westaim has higher earnings, but lower revenue than Profound Medical. Profound Medical is trading at a lower price-to-earnings ratio than Westaim, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Westaim has a beta of 0.45, indicating that its stock price is 55% less volatile than the S&P 500. Comparatively, Profound Medical has a beta of 0.88, indicating that its stock price is 12% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of current recommendations for Westaim and Profound Medical, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Westaim	0	0	0	0	0.00
Profound Medical	0	0	3	1	3.25

Profound Medical has a consensus price target of $13.75, suggesting a potential upside of 94.76%. Given Profound Medical’s stronger consensus rating and higher possible upside, analysts clearly believe Profound Medical is more favorable than Westaim.

Profitability

This table compares Westaim and Profound Medical’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Westaim	284.74%	7.76%	7.29%
Profound Medical	-349.41%	-85.22%	-64.87%

Summary

Westaim beats Profound Medical on 8 of the 15 factors compared between the two stocks.

About Westaim

The Westaim Corporation is a private equity firm specializing in direct and indirect investments through acquisitions, joint ventures, secondary investments both direct and indirect, fund of fund investments, and other arrangements. For direct investments, the firm invests in early venture, mid venture, late venture, middle market, later stage, mature, emerging growth, PIPEs, and buyout transactions. For fund of fund investments, it seeks to invest in private equity funds, venture capital funds, and hedge funds. The firm seeks to provide long term capital to businesses operating in the global financial services industry. It typically acquires controlling interests in businesses. The firm seeks to acquire debt, equity, or derivative securities of both public and private companies. It invests with the objective of providing its shareholders with capital appreciation and real wealth preservation. The firm seeks to provide its portfolio companies with advisory services including, but not limited to, advice on capital allocation, financing strategy, performance measurement and merger and acquisition support. It also seeks to partner with like-minded providers of third party capital to help supplement the firm's own capital, when completing acquisitions. The firm generally seeks to hold its investments for seven to 15 years. The Westaim Corporation was founded in 1996 and is based in Toronto, Canada.

About Profound Medical

Profound Medical Corp., together with its subsidiaries, operates as a commercial-stage medical device company that develops and markets incision-free therapeutic systems for the image guided ablation of diseased tissue in Canada, Germany, the United States, and Finland. Its lead product TULSA-PRO system combines magnetic resonance imaging(MRI), robotically-driven transurethral sweeping action/thermal ultrasound and closed-loop temperature feedback control to provide precise, flexible, and durable ablation of a surgeon defined region of prostate and protect the urethra and rectum. The company also offers Sonalleve, which combines real-time MRI and thermometry for the treatment of uterine fibroids, adenomyotic tissue, palliative pain treatment of bone metastases, osteoid osteoma, and management of benign tumors. Profound Medical Corp. is headquartered in Mississauga, Canada.