Reviewing CareDx (NASDAQ:CDNA) & Sotera Health (NASDAQ:SHC)

CareDx (NASDAQ:CDNA) and Sotera Health (NASDAQ:SHC) are both medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, dividends, profitability, valuation, earnings, institutional ownership and risk.

Insider and Institutional Ownership

91.0% of Sotera Health shares are owned by institutional investors. 4.4% of CareDx shares are owned by insiders. Comparatively, 47.5% of Sotera Health 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.

Profitability

This table compares CareDx and Sotera Health’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
CareDx	17.97%	18.03%	12.88%
Sotera Health	4.82%	43.69%	6.54%

Volatility & Risk

CareDx has a beta of 2.5, suggesting that its share price is 150% more volatile than the S&P 500. Comparatively, Sotera Health has a beta of 1.82, suggesting that its share price is 82% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of current ratings and recommmendations for CareDx and Sotera Health, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
CareDx	0	5	4	0	2.44
Sotera Health	0	3	3	0	2.50

CareDx currently has a consensus price target of $26.00, indicating a potential upside of 51.34%. Sotera Health has a consensus price target of $17.80, indicating a potential upside of 9.00%. Given CareDx’s higher probable upside, equities analysts plainly believe CareDx is more favorable than Sotera Health.

Valuation and Earnings

This table compares CareDx and Sotera Health”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
CareDx	$358.00 million	2.47	$52.55 million	$1.19	14.44
Sotera Health	$1.15 billion	4.03	$44.34 million	$0.19	85.95

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

About CareDx

CareDx, Inc. engages in the discovery, development, and commercialization of diagnostic solutions for transplant patients and caregivers in the United States and internationally. It also provides AlloSure Kidney, a donor-derived cell-free DNA (dd-cfDNA) solution for kidney transplant patients; AlloMap Heart, a gene expression solution for heart transplant patients; AlloSure Heart, a dd-cfDNA solution for heart transplant patients; and AlloSure Lung, a dd-cfDNA solution for lung transplant patients. The company offers Olerup SSP, which is used to type human leukocyte antigen (HLA) alleles based on sequence specific primer technology; QTYPE that enables precision in HLA typing; and Ottr, a transplant patient management software. In addition, it provides AlloSeq Tx, a high-resolution HLA typing solution; AlloSeq cfDNA, a surveillance solution to measure dd-cfDNA in blood; AlloSeq HCT, a solution for chimerism testing for stem cell transplant recipients; Allocell, a surveillance solution that monitors the level of engraftment and persistence of allogeneic cells for patients who have received cell therapy transplants; and XynQAPI cloud-based transplant quality management software, as well as AlloCare, a mobile app that offers a patient-centric resource for transplant recipients. The company offers its products directly to customers, as well as through third-party distributors and sub-distributors. It has a license agreement with Illumina, Inc. for the distribution, development, and commercialization of NGS products and technologies; and Cibiltech SAS to commercialize iBox, a software for the predictive analysis of post-transplantation kidney allograft loss. The company was formerly known as XDx, Inc. and changed its name to CareDx, Inc. in March 2014. The company was incorporated in 1998 and is headquartered in South San Francisco, California.

About Sotera Health

Sotera Health Company engages in the provision of sterilization, lab testing, and advisory services in the United States and internationally. The company operates through three segments: Sterigenics, Nordion, and Nelson Labs. It provides mission-critical end-to-end sterilization services, including gamma and electron beam irradiation, and ethylene oxide processing, as well as designs, installs, and maintains gamma irradiation systems. The company also provides microbiological and analytical chemistry testing, as well as technical assistance, regulatory consulting, and advisory services. It serves medical devices, pharmaceuticals, food safety, agricultural products, cancer treatment, and high-performance materials industries, as well as commercial, advanced, and specialty application industries. The company was formerly known as Sotera Health Topco, Inc. and changed its name to Sotera Health Company in October 2020. Sotera Health Company was incorporated in 2015 and is headquartered in Broadview Heights, Ohio.