Precision Optics (NASDAQ:POCI – Get Free Report) and OrthoPediatrics (NASDAQ:KIDS – Get Free Report) are both small-cap medical companies, but which is the better stock? We will contrast the two companies based on the strength of their profitability, institutional ownership, valuation, earnings, dividends, analyst recommendations and risk.
Risk & Volatility
Precision Optics has a beta of 0.38, suggesting that its share price is 62% less volatile than the S&P 500. Comparatively, OrthoPediatrics has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.
Analyst Ratings
This is a summary of current ratings for Precision Optics and OrthoPediatrics, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Precision Optics | 1 | 0 | 0 | 0 | 1.00 |
| OrthoPediatrics | 1 | 1 | 7 | 0 | 2.67 |
Valuation and Earnings
This table compares Precision Optics and OrthoPediatrics”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Precision Optics | $19.09 million | 1.73 | -$5.78 million | ($0.84) | -5.10 |
| OrthoPediatrics | $227.41 million | 1.77 | -$37.82 million | ($1.95) | -8.25 |
Precision Optics has higher earnings, but lower revenue than OrthoPediatrics. OrthoPediatrics is trading at a lower price-to-earnings ratio than Precision Optics, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Precision Optics and OrthoPediatrics’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Precision Optics | -30.28% | -51.33% | -31.18% |
| OrthoPediatrics | -20.06% | -6.85% | -5.00% |
Institutional & Insider Ownership
13.7% of Precision Optics shares are held by institutional investors. Comparatively, 69.1% of OrthoPediatrics shares are held by institutional investors. 13.0% of Precision Optics shares are held by company insiders. Comparatively, 32.7% of OrthoPediatrics shares are held by company 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.
Summary
OrthoPediatrics beats Precision Optics on 11 of the 14 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 OrthoPediatrics
OrthoPediatrics Corp., a medical device company, engages in designing, developing, and marketing anatomically appropriate implants, instruments, and specialized braces for children with orthopedic conditions in the United States and internationally. The company offers pediatric trauma and deformity correction products; scoliosis procedures for the treatment of spinal deformity; and sports medicine and other products. Its products comprise PediLoc, PediPlates, cannulated screws, PediFlex nail, PediNail, PediLoc Tibia, ACL Reconstruction System, Locking Cannulated Blade, Locking Proximal Femur, Spica Tables, RESPONSE Spine, BandLoc, Pediguard, Pediatric Nailing Platform | Femur, Devise Rail, Orthex, The Fassier-Duval Telescopic Intramedullary System, SLIMTM Nail, The GAP Nail, The Free Gliding SCFE Screw System, GIROTM Growth Modulation System, PNP Tibia System, ApiFix Mid-C System, and Mitchell Ponseti. The company serves pediatric orthopedic market, as well as pediatric orthopedic surgeons and caregivers. OrthoPediatrics Corp. was founded in 2006 and is headquartered in Warsaw, Indiana.
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