Critical Contrast: Globus Medical (NYSE:GMED) & Arch Therapeutics (OTCMKTS:ARTH)

Globus Medical (NYSE:GMED) and Arch Therapeutics (OTCMKTS:ARTH) are both medical companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, dividends, risk, valuation, institutional ownership and analyst recommendations.

Profitability

This table compares Globus Medical and Arch Therapeutics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Globus Medical	3.69%	9.98%	7.92%
Arch Therapeutics	-8,257.70%	N/A	-730.22%

Risk and Volatility

Globus Medical has a beta of 1.19, suggesting that its stock price is 19% more volatile than the S&P 500. Comparatively, Arch Therapeutics has a beta of 3.42, suggesting that its stock price is 242% more volatile than the S&P 500.

Institutional and Insider Ownership

95.2% of Globus Medical shares are owned by institutional investors. Comparatively, 6.9% of Arch Therapeutics shares are owned by institutional investors. 18.5% of Globus Medical shares are owned by insiders. Comparatively, 4.5% of Arch Therapeutics shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Globus Medical and Arch Therapeutics”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Globus Medical	$2.48 billion	4.54	$122.87 million	$0.67	123.39
Arch Therapeutics	$80,000.00	10.08	-$6.98 million	N/A	N/A

Globus Medical has higher revenue and earnings than Arch Therapeutics.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Globus Medical and Arch Therapeutics, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Globus Medical	1	2	9	0	2.67
Arch Therapeutics	0	0	0	0	0.00

Globus Medical presently has a consensus price target of $94.55, indicating a potential upside of 14.36%. Given Globus Medical’s stronger consensus rating and higher probable upside, analysts clearly believe Globus Medical is more favorable than Arch Therapeutics.

Summary

Globus Medical beats Arch Therapeutics on 10 of the 12 factors compared between the two stocks.

About Globus Medical

Globus Medical, Inc., a medical device company, develops and commercializes healthcare solutions for patients with musculoskeletal disorders in the United States and internationally. The company offers spine products, such as traditional fusion implants comprising pedicle screw and rod systems, plating systems, intervertebral spacers, and corpectomy devices for treating degenerative and congenital conditions, deformity, tumors, and trauma injuries; treatment options for motion preservation technologies that consist of dynamic stabilization, total disc replacement, and interspinous distraction devices; interventional solutions to treat vertebral compression fractures; and regenerative biologic products comprising of allografts and synthetic alternatives. It also offers products for the treatment of orthopedic trauma, including fracture plates, compression screws, intramedullary nails, and external fixation systems; and hip and knee joint solutions, including modular hip stems and acetabular cups, as well as posterior stabilizing and cruciate retaining knee arthroplasty implants. In addition, the company distributes human cell, tissue, and cellular and tissue-based products. It sells its products through direct or distributor sales representatives, as well as hip and knee products through independent sales agents. Globus Medical, Inc. was incorporated in 2003 and is headquartered in Audubon, Pennsylvania.

About Arch Therapeutics

Arch Therapeutics, Inc., together with its subsidiaries, operates as a biotechnology company in the United States. It develops and markets products based on its AC5 self-assembling technology platform to stop bleeding and control leaking, as well as manages wounds during surgery, trauma, and interventional care or from disease. The company's flagship products include AC5 advanced wound system and AC5 topical hemostat, which are intended for skin applications, such as management of complicated chronic wounds or acute surgical wounds. It is also involved in the development of AC5-G for gastrointestinal endoscopic procedures, and AC5-V and AC5 surgical hemostat for hemostasis inside the body. The company was founded in 2006 and is based in Framingham, Massachusetts.