For most investors, Smith & Nephew plc (NYSE: SNN) is a new name, but it’s been around for a long time. A medical technology company involved in designing and manufacturing medical equipment, Smith and Nephew has an excellent market capitalization of $14.7 billion, while the average trading volume is 823,057 shares. This depicts that in a highly volatile market, SNN has remained a bit stable owing to a huge trading volume. This in turn translates to the domination of bulls for Smith & Nephew during the near future.
Recent Development for SNN
One of the premier products produced by Smith & Nephew was GRAFIX™ Membrane, the human placental tissue product which is used for the treatment of acute and chronic wounds. Recently, SNN has announced that a peer-reviewed study which was published in Advances in Wound Care Journal showed that GRAFIX Cryopreserved Placental Membrane had the ability to cut diabetic foot ulcer recurrence rate in half when compared to the leading cellular and tissue-based product competitors. The findings carry a huge value as diabetic foot ulcer has the capability to affect more than 3 million people annually in the US alone, while the estimated medicare spending for this issue lies between $6 and $18 billion annually.
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Valuation Looking Strong
The recent financials and valuation parameters are depicting the signs of recovery Smith & Nephew. The company its business getting slowed down in the wake of the pandemic but is bouncing back steadily. During the third quarter of 2021, SNN generated revenue of $1.26 billion, up 5.5% on a reported basis. For comparison, in the third quarter of 2020 revenue of $1.2 billion was down 3.7% on a reported basis. The dividend yield of 2.2% seems to be okay for the moment, as the company hasn’t raised its dividend since the onset of the pandemic. However, with an increase in earnings, it is expected to do so in the future. The beta value of 0.68 is the epitome of the stability associated with the stock.
Despite all the excellent facts and figures, there appears to be some confusion among the investors regarding investment in SNN, as the stock hasn’t been up to the mark during the last couple of years. However, as recent results have depicted, the stock has the capability to provide prudent investors with hefty returns.