Contrasting Varex Imaging (NASDAQ:VREX) & Diamond Eagle Acquisition (NASDAQ:VRT)

Varex Imaging (NASDAQ:VREX) and Diamond Eagle Acquisition (NYSE:VRT) are both medical companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, valuation, analyst recommendations, profitability, dividends, earnings and risk.

Earnings and Valuation

This table compares Varex Imaging and Diamond Eagle Acquisition’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Varex Imaging $780.60 million 0.72 $15.50 million $1.30 11.05
Diamond Eagle Acquisition N/A N/A $4.39 million $0.05 262.20

Varex Imaging has higher revenue and earnings than Diamond Eagle Acquisition. Varex Imaging is trading at a lower price-to-earnings ratio than Diamond Eagle Acquisition, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Varex Imaging has a beta of 1.25, suggesting that its share price is 25% more volatile than the S&P 500. Comparatively, Diamond Eagle Acquisition has a beta of 1.02, suggesting that its share price is 2% more volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Varex Imaging and Diamond Eagle Acquisition, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Varex Imaging 0 2 3 0 2.60
Diamond Eagle Acquisition 0 0 3 0 3.00

Varex Imaging currently has a consensus target price of $33.20, indicating a potential upside of 131.04%. Diamond Eagle Acquisition has a consensus target price of $14.50, indicating a potential upside of 10.60%. Given Varex Imaging’s higher probable upside, equities analysts clearly believe Varex Imaging is more favorable than Diamond Eagle Acquisition.

Institutional and Insider Ownership

90.0% of Varex Imaging shares are held by institutional investors. Comparatively, 79.5% of Diamond Eagle Acquisition shares are held by institutional investors. 3.3% of Varex Imaging shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Varex Imaging and Diamond Eagle Acquisition’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Varex Imaging 0.58% 8.89% 3.76%
Diamond Eagle Acquisition N/A -33.10% -1.70%

Summary

Varex Imaging beats Diamond Eagle Acquisition on 11 of the 12 factors compared between the two stocks.

About Varex Imaging

Varex Imaging Corporation designs and manufactures X-ray imaging components. The company operates in two segments, Medical and Industrial. The Medical segment designs, manufactures, sells, and services X-ray imaging components comprising X-ray tubes, digital detectors, high voltage connectors, image-processing software and workstations, computer-aided diagnostic software, collimators, automatic exposure control devices, generators, ionization chambers, and buckys. This segment's products are used in a range of applications, including radiographic and fluoroscopic imaging, mammography, computed tomography, radiation therapy, oncology, cardiac, surgery, dental, and computer-aided detection. The Industrial segment designs, manufactures, sells, and services Linatron X-ray accelerators, X-ray tubes, digital detectors, high voltage connectors, and image-processing software for use in security and industrial inspection applications, such as airport security, cargo screening at ports and borders, and nondestructive examination in various applications. Varex Imaging Corporation sells its products through imaging system original equipment manufacturers, independent service companies, and distributors, as well as directly to end-users. The company has operations in North America, Latin America, Europe, Russia, the Middle East, India, Africa, Asia, and Australia. Varex Imaging Corporation is headquartered in Salt Lake City, Utah.

About Diamond Eagle Acquisition

GS Acquisition Holdings Corp (NYSE: GSAH) is a special purpose acquisition company formed for the purpose of effecting merger, stock purchase or similar business combination with one or more businesses. The company is sponsored by an affiliate of The Goldman Sachs Group, Inc. and David M. Cote. The company’s strategy is to identify and complete its initial business combination with a business in the diversified industrial sector, which includes, among others, Aerospace & Defense, Industrial Services, Chemicals, Home & Building Products, Building & Construction, Capital Goods, Packaging and Supply Chain, that stands to benefit from Mr. Cote’s experience and operating capabilities. In June 2018, GS Acquisition Holdings completed its initial public offer, raising $690 million from investors.

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