Analyzing AtriCure (NASDAQ:ATRC) and Westaim (OTCMKTS:WEDXF)

Westaim (OTCMKTS:WEDXF) and AtriCure (NASDAQ:ATRC) are both small-cap basic materials companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, profitability, risk and earnings.

Profitability

This table compares Westaim and AtriCure’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Westaim	737.56%	12.54%	11.85%
AtriCure	-9.33%	-8.39%	-6.45%

Analyst Ratings

This is a summary of recent ratings and target prices for Westaim and AtriCure, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Westaim	0	0	0	0	N/A
AtriCure	0	0	9	0	3.00

AtriCure has a consensus price target of $42.44, indicating a potential upside of 50.62%. Given AtriCure’s higher possible upside, analysts plainly believe AtriCure is more favorable than Westaim.

Insider & Institutional Ownership

99.1% of AtriCure shares are owned by institutional investors. 4.2% of Westaim shares are owned by company insiders. Comparatively, 3.2% of AtriCure shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Earnings and Valuation

This table compares Westaim and AtriCure”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Westaim	$8.63 million	43.06	$183.98 million	$0.81	3.58
AtriCure	$429.95 million	3.12	-$30.44 million	($0.80)	-35.23

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

Volatility and Risk

Westaim has a beta of 0.5, suggesting that its share price is 50% less volatile than the S&P 500. Comparatively, AtriCure has a beta of 1.43, suggesting that its share price is 43% more volatile than the S&P 500.

Summary

Westaim beats AtriCure on 8 of the 13 factors compared between the two stocks.

About Westaim

The Westaim Corporation is a private equity firm specializing in direct and indirect investments through acquisitions, joint ventures, secondary investments both direct and indirect, fund of fund investments, and other arrangements. For direct investments, the firm invests in early venture, mid venture, late venture, middle market, later stage, mature, emerging growth, PIPEs, and buyout transactions. For fund of fund investments, it seeks to invest in private equity funds, venture capital funds, and hedge funds. The firm seeks to provide long term capital to businesses operating in the global financial services industry. It typically acquires controlling interests in businesses. The firm seeks to acquire debt, equity, or derivative securities of both public and private companies. It invests with the objective of providing its shareholders with capital appreciation and real wealth preservation. The firm seeks to provide its portfolio companies with advisory services including, but not limited to, advice on capital allocation, financing strategy, performance measurement and merger and acquisition support. It also seeks to partner with like-minded providers of third party capital to help supplement the firm's own capital, when completing acquisitions. The firm generally seeks to hold its investments for seven to 15 years. The Westaim Corporation was founded in 1996 and is based in Toronto, Canada.

About AtriCure

AtriCure, Inc. develops, manufactures, and sells devices for surgical ablation of cardiac tissue, exclusion of the left atrial appendage, and temporarily blocking pain by ablating peripheral nerves to medical centers in the United States, Europe, the Asia-Pacific, and internationally. The company offers Isolator Synergy Clamps, single-use disposable radio frequency products; multifunctional pens and linear ablation devices, such as the MAX Pen device that enables surgeons to evaluate cardiac arrhythmias, perform temporary cardiac pacing, sensing, and stimulation, and ablate cardiac tissue with the same device; and the Coolrail device, which enables users to make longer linear lines of ablation. It also provides cryoICE Cryoablation System that enables the user to make linear ablations of varied lengths; EPi-Sense Systems, a single-use disposable device used for the treatment of symptomatic, drug-refractory, and long-standing persistent atrial fibrillation; cryoSPHERE probe, which provides temporary pain relief by applying cryothermic energy to targeted intercoastal peripheral nerves in the ribcage; AtriClip System, an implantable device coupled to a single-use disposable applier; and LARIAT System, a suture-based solution for soft-tissue closure. In addition, the company sells Lumitip dissectors to separate tissues to provide access to key anatomical structures that are targeted for ablation; Glidepath guides for placement of clamps; Subtle Cannula's to support access for EPi-Sense catheters; and various reusable cardiac surgery instruments. It markets and sells its products through independent distributors and direct sales personnel. The company was incorporated in 2000 and is headquartered in Mason, Ohio.