Critical Contrast: Tactile Systems Technology (NASDAQ:TCMD) & Pro-Dex (NASDAQ:PDEX)

Tactile Systems Technology (NASDAQ:TCMD) and Pro-Dex (NASDAQ:PDEX) are both small-cap medical companies, but which is the better business? We will contrast the two companies based on the strength of their analyst recommendations, earnings, institutional ownership, risk, dividends, valuation and profitability.

Risk and Volatility

Tactile Systems Technology has a beta of 1.18, meaning that its share price is 18% more volatile than the S&P 500. Comparatively, Pro-Dex has a beta of 0.39, meaning that its share price is 61% less volatile than the S&P 500.

Institutional & Insider Ownership

83.4% of Tactile Systems Technology shares are owned by institutional investors. Comparatively, 15.3% of Pro-Dex shares are owned by institutional investors. 1.0% of Tactile Systems Technology shares are owned by insiders. Comparatively, 42.6% of Pro-Dex shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Tactile Systems Technology and Pro-Dex’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Tactile Systems Technology	11.57%	16.94%	11.60%
Pro-Dex	3.95%	6.82%	4.17%

Earnings and Valuation

This table compares Tactile Systems Technology and Pro-Dex”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Tactile Systems Technology	$274.42 million	1.23	$28.51 million	$1.20	11.82
Pro-Dex	$53.84 million	1.86	$2.13 million	$0.58	50.43

Tactile Systems Technology has higher revenue and earnings than Pro-Dex. Tactile Systems Technology is trading at a lower price-to-earnings ratio than Pro-Dex, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and target prices for Tactile Systems Technology and Pro-Dex, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Tactile Systems Technology	0	0	0	1	4.00
Pro-Dex	0	0	1	0	3.00

Tactile Systems Technology presently has a consensus price target of $23.00, indicating a potential upside of 62.20%. Pro-Dex has a consensus price target of $30.00, indicating a potential upside of 2.56%. Given Tactile Systems Technology’s stronger consensus rating and higher probable upside, analysts clearly believe Tactile Systems Technology is more favorable than Pro-Dex.

Summary

Tactile Systems Technology beats Pro-Dex on 11 of the 15 factors compared between the two stocks.

About Tactile Systems Technology

Tactile Systems Technology, Inc., a medical technology company, develops and provides medical devices to treat underserved chronic diseases in the United States. It offers Flexitouch Plus system, a pneumatic compression device for the treatment of lymphedema in the home setting; and Entre Plus System, a portable pneumatic compression device for the at-home treatment of venous disorders, such as lymphedema and chronic venous insufficiency, including venous leg ulcers. The company also provides Kylee, a mobile application to help patients learn about lymphedema, track their symptoms, and treatment, as well as to share their progress with their doctor; and AffloVest, a portable high frequency chest wall oscillation vest to treat patients with retained pulmonary secretions resulting from bronchiectasis, cystic fibrosis, and various neuromuscular disorders. Tactile Systems Technology, Inc. was incorporated in 1995 and is headquartered in Minneapolis, Minnesota.

About Pro-Dex

Pro-Dex, Inc. designs, develops, manufactures, and sells powered surgical instruments for medical device original equipment manufacturers worldwide. The company offers autoclavable, battery-powered and electric, and multi-function surgical drivers and shavers that are primarily used in the orthopedic, thoracic, and craniomaxillofacial markets. It also provides engineering, quality, and regulatory consulting services; and manufactures and sells rotary air motors to various industries. The company's products are used in hospitals, medical engineering labs, scientific research facilities, and high-tech manufacturing operations. Pro-Dex, Inc. was founded in 1978 and is headquartered in Irvine, California.