Analyzing Medtronic (NYSE:MDT) and Precision Optics (NASDAQ:POCI)

Precision Optics (NASDAQ:POCI) and Medtronic (NYSE:MDT) are both medical companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, dividends, earnings, valuation and risk.

Profitability

This table compares Precision Optics and Medtronic’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Precision Optics	-20.01%	-35.51%	-21.67%
Medtronic	13.00%	13.79%	7.62%

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Precision Optics and Medtronic, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Precision Optics	0	0	0	0	0.00
Medtronic	1	9	6	1	2.41

Medtronic has a consensus price target of $95.00, indicating a potential upside of 6.39%. Given Medtronic’s stronger consensus rating and higher possible upside, analysts plainly believe Medtronic is more favorable than Precision Optics.

Valuation and Earnings

This table compares Precision Optics and Medtronic”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Precision Optics	$19.10 million	1.71	-$2.95 million	($0.62)	-8.29
Medtronic	$32.36 billion	3.54	$3.68 billion	$3.27	27.31

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

Risk & Volatility

Precision Optics has a beta of 0.27, suggesting that its share price is 73% less volatile than the S&P 500. Comparatively, Medtronic has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500.

Institutional & Insider Ownership

13.7% of Precision Optics shares are owned by institutional investors. Comparatively, 82.1% of Medtronic shares are owned by institutional investors. 16.3% of Precision Optics shares are owned by insiders. Comparatively, 0.2% of Medtronic shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Summary

Medtronic beats Precision Optics on 14 of the 15 factors compared between the two stocks.

About Precision Optics

Precision Optics Corporation, Inc. designs, develops, manufactures, and sells specialized optical and illumination systems and related components primarily in the United States and the European Economic Area. It offers medical instrumentation products, including endoscopes and endocouplers, as well as other custom imaging and illumination products, such as Microprecision lenses and micro medical cameras, and 3D endoscopes for use in minimally invasive surgical procedures by hospitals and physicians. The company also provides components and assemblies for industrial and military use. It markets its products to medical device companies. The company was incorporated in 1982 and is based in Gardner, Massachusetts.

About Medtronic

Medtronic plc develops, manufactures, and sells device-based medical therapies to healthcare systems, physicians, clinicians, and patients worldwide. Its Cardiovascular Portfolio segment offers implantable cardiac pacemakers, cardioverter defibrillators, and cardiac resynchronization therapy devices; cardiac ablation products; insertable cardiac monitor systems; TYRX products; and remote monitoring and patient-centered software. It also provides aortic valves, surgical valve replacement and repair products, endovascular stent grafts and accessories, and transcatheter pulmonary valves; and percutaneous coronary intervention products, percutaneous angioplasty balloons, and products. The company's Medical Surgical Portfolio segment offers surgical stapling devices, vessel sealing instruments, wound closure, electrosurgery products, surgical artificial intelligence and robotic-assisted surgery products, hernia mechanical devices, mesh implants, gynecology and lung products, and various therapies to treat diseases, as well as products in the fields of minimally invasive gastrointestinal and hepatologic diagnostics and therapies, patient monitoring, airway management and ventilation therapies, and renal disease. Its Neuroscience Portfolio segment offers products for spinal surgeons; neurosurgeons; neurologists; pain management specialists; anesthesiologists; orthopedic surgeons; urologists; urogynecologists; interventional radiologists; ear, nose, and throat specialists; and systems that incorporate energy surgical instruments. It also provides image-guided surgery and intra-operative imaging systems and robotic guidance systems used in robot assisted spine procedures; and therapies for vasculature in and around the brain. The company's Diabetes Operating Unit segment offers insulin pumps and consumables, continuous glucose monitoring systems, smart insulin pen systems, and consumables and supplies. The company was founded in 1949 and is headquartered in Dublin, Ireland.