BSX vs. MDT: Which MedSurg Stock Is the Better Investment Now?

Industry Overview - The MedSurg equipment market is projected to grow at a compound annual growth rate (CAGR) of 9.54% from 2025 to 2030 [1] - The growth is driven by an aging population, rising chronic diseases, and rapid technological advancements [3] Boston Scientific (BSX) - Boston Scientific's MedSurg segment is gaining market share, particularly in Endoscopy, Urology, and Neuromodulation [4] - The Endoscopy segment is experiencing growth due to endoluminal surgery and single-use imaging [4] - Urology is benefiting from strong contributions from the Core Stone and prosthetic urology franchises [4] - Neuromodulation is boosted by new products like Cartesia leads and Lumina 3D programming algorithm [4] - The structural heart segment is also performing well, with a 24% growth in WATCHMAN sales [5] - Emerging markets are a vital growth engine, with net sales growing nearly 9.8% year-over-year [6] - In Q1, Boston Scientific reported an adjusted gross margin increase of 19 basis points and an operating margin improvement of 127 basis points [7] - The company raised its full-year 2025 outlook, projecting 15-17% reported net sales growth and adjusted EPS of $2.87-$2.94 [7] Medtronic (MDT) - Medtronic's MedSurg portfolio is benefiting from positive sales momentum in Surgical Robotics, particularly the Hugo robotic-assisted surgery system [8] - The Hugo RAS system has expanded its installed base to 30 countries, with growth in procedure volumes and utilization [8] - Medtronic is seeing significant growth in Cardiac Ablation Solutions, with nearly 30% growth in the fiscal fourth quarter [9] - The company is focused on expansion in emerging markets, which grew mid-single digits in the quarter [11] - Medtronic's operational performance in Q1 showed gross margin improvement of 19 basis points and operating margin growth of 210 basis points [12] - For fiscal 2026, Medtronic projects organic revenue growth of 5% over fiscal 2025 [12] Stock Performance - Over the past year, Boston Scientific's shares have risen by 35.2%, while Medtronic's shares have gained only 7.4% [13] - Boston Scientific is trading at a forward five-year price-to-sales (P/S) ratio of 7.5X, compared to Medtronic's 3.1X [15] - The Zacks Consensus Estimate for Boston Scientific's 2025 EPS implies a year-over-year improvement of 15.9% [17] - Analysts have shown declining confidence in Medtronic, with downward EPS estimate revisions in the last 60 days [18] Investment Outlook - Boston Scientific is gaining strength across MedSurg and structural heart segments, supported by innovation and global expansion [19] - Despite expected tariff impacts, Boston Scientific's raised guidance reflects confidence in sustained growth [19] - Medtronic, while carrying a Zacks Rank 4 (Sell), may attract value-focused investors due to its discounted P/S ratio [20]