Financial Comparison: AtriCure (NASDAQ:ATRC) vs. Baxter International (NYSE:BAX)

Baxter International (NYSE:BAX) and AtriCure (NASDAQ:ATRC) are both medical companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, valuation, institutional ownership and risk.

Analyst Recommendations

This is a breakdown of recent ratings and price targets for Baxter International and AtriCure, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Baxter International	0	9	2	0	2.18
AtriCure	0	0	7	0	3.00

Baxter International presently has a consensus price target of $44.42, suggesting a potential upside of 31.64%. AtriCure has a consensus price target of $49.78, suggesting a potential upside of 137.38%. Given AtriCure’s stronger consensus rating and higher probable upside, analysts plainly believe AtriCure is more favorable than Baxter International.

Profitability

This table compares Baxter International and AtriCure’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Baxter International	17.79%	18.47%	4.91%
AtriCure	-8.98%	-7.85%	-6.05%

Institutional & Insider Ownership

90.2% of Baxter International shares are held by institutional investors. Comparatively, 99.1% of AtriCure shares are held by institutional investors. 0.2% of Baxter International shares are held by company insiders. Comparatively, 3.2% of AtriCure shares are held by company 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.

Earnings and Valuation

This table compares Baxter International and AtriCure’s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Baxter International	$14.81 billion	1.16	$2.66 billion	$5.20	6.49
AtriCure	$399.24 million	2.50	-$30.44 million	($0.80)	-26.21

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

Volatility and Risk

Baxter International has a beta of 0.61, indicating that its stock price is 39% less volatile than the S&P 500. Comparatively, AtriCure has a beta of 1.42, indicating that its stock price is 42% more volatile than the S&P 500.

About Baxter International

Baxter International Inc., through its subsidiaries, develops and provides a portfolio of healthcare products worldwide. The company operates through four segments: Medical Products and Therapies, Healthcare Systems and Technologies, Pharmaceuticals, and Kidney Care. The company offers sterile intravenous (IV) solutions; infusion systems and devices; parenteral nutrition therapies; generic injectable pharmaceuticals; surgical hemostat and sealant products, advanced surgical equipment; smart bed systems; patient monitoring and diagnostic technologies; and respiratory health devices, as well as advanced equipment for the surgical space, including surgical video technologies, precision positioning devices, and other accessories. It also provides administrative sets; adhesion prevention products; inhaled anesthesia; drug compounding; chronic and acute dialysis therapies and services, including peritoneal dialysis (PD), hemodialysis (HD), continuous renal replacement therapies (CRRT), and other organ support therapies. The company's products are used in hospitals, kidney dialysis centers, nursing homes, rehabilitation centers, ambulatory surgery centers, doctors' offices, and patients at home under physician supervision. The company sells its products through direct sales force, as well as through independent distributors, drug wholesalers, and specialty pharmacy or other alternate site providers in approximately 100 countries. It has an agreement with Celerity Pharmaceutical, LLC to develop acute care generic injectable premix and oncolytic products; and a collaborative research agreement with Miromatrix Medical Inc. aiming to advance care for patients with acute liver failure. Baxter International Inc. was incorporated in 1931 and is headquartered in Deerfield, Illinois.

About AtriCure

AtriCure, Inc. develops, manufactures, and sells devices for surgical ablation of cardiac tissue, exclusion of the left atrial appendage, and temporarily blocking pain by ablating peripheral nerves to medical centers in the United States, Europe, the Asia-Pacific, and internationally. The company offers Isolator Synergy Clamps, single-use disposable radio frequency products; multifunctional pens and linear ablation devices, such as the MAX Pen device that enables surgeons to evaluate cardiac arrhythmias, perform temporary cardiac pacing, sensing, and stimulation, and ablate cardiac tissue with the same device; and the Coolrail device, which enables users to make longer linear lines of ablation. It also provides cryoICE Cryoablation System that enables the user to make linear ablations of varied lengths; EPi-Sense Systems, a single-use disposable device used for the treatment of symptomatic, drug-refractory, and long-standing persistent atrial fibrillation; cryoSPHERE probe, which provides temporary pain relief by applying cryothermic energy to targeted intercoastal peripheral nerves in the ribcage; AtriClip System, an implantable device coupled to a single-use disposable applier; and LARIAT System, a suture-based solution for soft-tissue closure. In addition, the company sells Lumitip dissectors to separate tissues to provide access to key anatomical structures that are targeted for ablation; Glidepath guides for placement of clamps; Subtle Cannula's to support access for EPi-Sense catheters; and various reusable cardiac surgery instruments. It markets and sells its products through independent distributors and direct sales personnel. The company was incorporated in 2000 and is headquartered in Mason, Ohio.