Eagle Pharmaceuticals (NASDAQ: EGRX) and AbbVie (NYSE:ABBV) are both medical companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, dividends, profitability, earnings and risk.

Dividends

AbbVie pays an annual dividend of $2.56 per share and has a dividend yield of 3.5%. Eagle Pharmaceuticals does not pay a dividend. AbbVie pays out 62.9% of its earnings in the form of a dividend. Eagle Pharmaceuticals has increased its dividend for 44 consecutive years.

Profitability

This table compares Eagle Pharmaceuticals and AbbVie’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Eagle Pharmaceuticals 39.32% 66.30% 48.44%
AbbVie 24.77% 150.27% 12.52%

Insider and Institutional Ownership

68.3% of AbbVie shares are owned by institutional investors. 19.5% of Eagle Pharmaceuticals shares are owned by company insiders. Comparatively, 0.2% of AbbVie shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Recommendations

This is a summary of current ratings and recommmendations for Eagle Pharmaceuticals and AbbVie, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Eagle Pharmaceuticals 1 0 3 0 2.50
AbbVie 0 7 6 1 2.57

Eagle Pharmaceuticals currently has a consensus target price of $73.25, suggesting a potential upside of 29.76%. AbbVie has a consensus target price of $76.31, suggesting a potential upside of 4.07%. Given Eagle Pharmaceuticals’ higher possible upside, equities analysts clearly believe Eagle Pharmaceuticals is more favorable than AbbVie.

Volatility and Risk

Eagle Pharmaceuticals has a beta of 1.31, indicating that its share price is 31% more volatile than the S&P 500. Comparatively, AbbVie has a beta of 1.5, indicating that its share price is 50% more volatile than the S&P 500.

Valuation & Earnings

This table compares Eagle Pharmaceuticals and AbbVie’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Eagle Pharmaceuticals $245.88 million 3.48 $83.99 million $5.95 9.49
AbbVie $26.71 billion 4.38 $11.57 billion $4.07 18.01

AbbVie has higher revenue and earnings than Eagle Pharmaceuticals. Eagle Pharmaceuticals is trading at a lower price-to-earnings ratio than AbbVie, indicating that it is currently the more affordable of the two stocks.

Summary

AbbVie beats Eagle Pharmaceuticals on 11 of the 18 factors compared between the two stocks.

Eagle Pharmaceuticals Company Profile

Eagle Pharmaceuticals, Inc. is a specialty pharmaceutical company. The Company focuses on developing and commercializing injectable products in the critical care and oncology areas. The Company’s product portfolio includes products, including Argatroban; Ryanodex; docetaxel injection, non-alcohol formulation; and Bendeka. Its advanced candidates include EP-3101 (bendamustine Resistance Temperature Detectors (RTD)) (EP-3101), EP-4104 (dantrolene sodium for exertional heat stroke (EHS)) (EP-4104), EGL-4104-C-1702 (dantrolene sodium for drug induced hyperthermia), EP-5101 (pemetrexed) (EP-5101) and EGL-5385-C-1701 (fulvestrant). Its product portfolio focuses on oncology, critical care and orphan diseases. Bendamustine is an alkylating agent approved for use in chronic lymphocytic leukemia (CLL), and indolent B-cell non-Hodgkin’s lymphoma (NHL), that has progressed during or within six months of treatment with rituximab or a rituximab-containing regimen.

AbbVie Company Profile

AbbVie Inc. (AbbVie) is a research-based biopharmaceutical company. The Company is engaged in the discovery, development, manufacture and sale of a range of pharmaceutical products. Its products are focused on treating conditions, such as chronic autoimmune diseases in rheumatology, gastroenterology and dermatology; oncology, including blood cancers; virology, including hepatitis C virus (HCV) and human immunodeficiency virus (HIV); neurological disorders, such as Parkinson’s disease and multiple sclerosis; metabolic diseases, including thyroid disease and complications associated with cystic fibrosis, and other serious health conditions. It offers products in various categories, including HUMIRA (adalimumab), Oncology products, Virology Products, Additional Virology products, Metabolics/Hormones products, Endocrinology products and other products, which include Duopa and Duodopa (carbidopa and levodopa), Anesthesia products and ZINBRYTA (daclizumab).

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