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How Does Cantel Medical Compare to Its Peers?

Gabriel Kane

US Equity Market Update for September 29, 2015

(Continued from Prior Part)

Cantel Medical and its peers

An analysis of Cantel Medical’s income statement in 4Q15 follows:

  • The net profit margins of Cantel Medical (CMN), Ecolab (ECL), Fresenius Medical Care AG & Co. ADR (FMS), DENTSPLY International (XRAY), and STERIS (STE) are 8.77%, 9.11%, 7.37%, 7.48%, and 5.52%, respectively.

  • The EPS (earnings per share) of Cantel Medical, Ecolab, Fresenius Medical, DENTSPLY, and STERIS are $0.32, $1, $0.79, $0.31, and $0.40, respectively.

An analysis of Cantel Medical’s balance sheet in 4Q15 follows:

  • The current ratios of Cantel Medical, Ecolab, Fresenius Medical, DENTSPLY, and STERIS are 2.66, 1.12, 1.85, 2.07, and 2.79, respectively.

An analysis of Cantel Medical’s valuation follows:

  • The PE (price-to-earnings) ratios of Cantel Medical, Ecolab, Fresenius Medical, DENTSPLY, and STERIS are 49.98x, 26.69x, 22.17x, 27.02x, and 28.74x, respectively.
  • The PBV (price-to-book value) ratios of Cantel Medical, Ecolab, Fresenius Medical, DENTSPLY, and STERIS are 5.69x, 4.71x, 2.45x, 3.05x, and 3.51x, respectively.

According to the above findings, Cantel Medical outperformed its peers based on the net profit margin, current ratio, PE ratio, and PBV ratio.

ETFs that invest in Cantel Medical 

The Market Vectors Environmental Services ETF (EVX) invests 3.80% of its holdings in Cantel Medical. EVX tracks a tiered and equal-weighted index of companies that stand to benefit from increased demand for waste management.

The PowerShares S&P SmallCap Health Care ETF (PSCH) invests 1.99% of its holdings in Cantel Medical. PSCH tracks a cap-weighted index of small-cap healthcare companies taken from the S&P SmallCap 600 Index.

The PowerShares DWA Healthcare Momentum Portfolio (PTH) invests 1.18% of its holdings in Cantel Medical. PTH tracks an index of US healthcare firms selected and weighted by price momentum.

Comparing Cantel Medical and its ETFs

An analysis of Cantel Medical’s valuation follows:

  • The PE ratios of Cantel Medical (CMN), EVX, and PSCH are 49.98x, 48.26x, and 52.49x, respectively.
  • The PBV ratios of Cantel Medical (CMN), EVX, PSCH, and PTH are 5.69x, 2.26x, 3.47x, and 6.22x, respectively.

As a result, Cantel Medical outperformed its ETFs based on the PBV ratio.

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