Analyzing Paragon 28 (NYSE:FNA) & Pro-Dex (NASDAQ:PDEX)

Pro-Dex (NASDAQ:PDEX) and Paragon 28 (NYSE:FNA) are both small-cap medical companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, valuation, profitability, institutional ownership and earnings.

Volatility & Risk

Pro-Dex has a beta of 0.68, indicating that its share price is 32% less volatile than the S&P 500. Comparatively, Paragon 28 has a beta of 1.54, indicating that its share price is 54% more volatile than the S&P 500.

Profitability

This table compares Pro-Dex and Paragon 28’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Pro-Dex	11.06%	21.68%	12.40%
Paragon 28	-25.31%	-37.90%	-18.22%

Analyst Recommendations

This is a breakdown of current ratings for Pro-Dex and Paragon 28, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pro-Dex	0	0	1	0	3.00
Paragon 28	0	4	2	0	2.33

Pro-Dex presently has a consensus target price of $52.00, indicating a potential upside of 4.46%. Paragon 28 has a consensus target price of $14.20, indicating a potential upside of 8.85%. Given Paragon 28’s higher probable upside, analysts plainly believe Paragon 28 is more favorable than Pro-Dex.

Valuation & Earnings

This table compares Pro-Dex and Paragon 28″s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pro-Dex	$61.00 million	2.66	$2.13 million	$2.01	24.77
Paragon 28	$256.18 million	4.27	-$57.53 million	($0.63)	-20.71

Pro-Dex has higher earnings, but lower revenue than Paragon 28. Paragon 28 is trading at a lower price-to-earnings ratio than Pro-Dex, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

15.3% of Pro-Dex shares are held by institutional investors. Comparatively, 63.6% of Paragon 28 shares are held by institutional investors. 47.5% of Pro-Dex shares are held by company insiders. Comparatively, 15.3% of Paragon 28 shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Summary

Pro-Dex beats Paragon 28 on 8 of the 14 factors compared between the two stocks.

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.

About Paragon 28

Paragon 28, Inc. develops, distributes, and sells foot and ankle surgical systems in the United States and internationally. It offers plating systems, including gorilla plating systems, such as lisfranc, lapidus, lateral column, calcaneus slide, and naviculocuneiform (NC) fusion plating systems; baby gorilla plate-specific screws, navicular fracture plates, and 5th metatarsal hook plates; and silverback plating systems. The company also provides precision guide technology for various procedures consisting of fusion, a procedure to address bunion deformities that fuses two bones on the big toe; first tarsometatarsal arthrodesis; and metatarsal osteotomy for bunion correction, medial column beaming for charcot foot reconstruction, ankle fusion plating, and NC joint arthrodesis. In addition, it offers monster, mini monster, and joust beaming screw systems for use in bone reconstruction, osteotomy, arthrodesis, joint fusion, ligament fixation, fracture repair, and fracture fixation; APEX 3D total ankle replacement systems; and total talus spacers to replace the talus and bone in the ankle that connects the leg and foot. Further, the company provides forefoot or hallux valgus correction systems, including phantom intramedullary nail systems for the treatment of severe hallux valgus; and various orthobiologics comprising bone wedges, grafts, demineralized bone matrices, bone void fillers, synthetic materials, amniotic products, and a biocompatible collagen matrix, as well as PRESERVE bone graft systems for homologous application. Additionally, it offers soft tissue fixation systems, titanium sprayed polyetheretherketone implants, nitinol staple systems, stabilization systems, and curved instruments. The company serves hospitals and ambulatory surgery centers through a network of sales representatives and stocking distributors. Paragon 28, Inc. was founded in 2010 and is headquartered in Englewood, Colorado.