Rockwell Medical (NASDAQ: RMTI) and Eagle Pharmaceuticals (NASDAQ:EGRX) are both small-cap medical companies, but which is the superior investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, valuation, earnings, institutional ownership, profitability and dividends.

Volatility & Risk

Rockwell Medical has a beta of 2.1, meaning that its stock price is 110% more volatile than the S&P 500. Comparatively, Eagle Pharmaceuticals has a beta of 1.3, meaning that its stock price is 30% more volatile than the S&P 500.

Analyst Ratings

This is a breakdown of recent ratings and target prices for Rockwell Medical and Eagle Pharmaceuticals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Rockwell Medical 1 0 1 1 2.67
Eagle Pharmaceuticals 1 0 3 0 2.50

Rockwell Medical currently has a consensus target price of $9.33, suggesting a potential upside of 45.83%. Eagle Pharmaceuticals has a consensus target price of $73.25, suggesting a potential upside of 29.97%. Given Rockwell Medical’s stronger consensus rating and higher probable upside, research analysts clearly believe Rockwell Medical is more favorable than Eagle Pharmaceuticals.

Insider and Institutional Ownership

21.4% of Rockwell Medical shares are held by institutional investors. 15.9% of Rockwell Medical shares are held by company insiders. Comparatively, 19.5% of Eagle Pharmaceuticals shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Rockwell Medical and Eagle Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Rockwell Medical -39.68% -42.22% -27.15%
Eagle Pharmaceuticals 39.32% 66.30% 48.44%

Valuation and Earnings

This table compares Rockwell Medical and Eagle Pharmaceuticals’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Rockwell Medical $54.04 million 6.13 -$21.07 million ($0.42) -15.24
Eagle Pharmaceuticals $245.88 million 3.48 $83.99 million $5.95 9.47

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

Summary

Eagle Pharmaceuticals beats Rockwell Medical on 8 of the 14 factors compared between the two stocks.

Rockwell Medical Company Profile

Rockwell Medical, Inc. (Rockwell) is a biopharmaceutical company targeting end-stage renal disease (ESRD) and chronic kidney disease (CKD) with products and services for the treatment of iron deficiency, secondary hyperparathyroidism and hemodialysis. The Company operates through the hemodialysis market segment, which involves the manufacture, sale and distribution of hemodialysis products to hemodialysis clinics, including pharmaceutical, dialysis concentrates, dialysis kits and other ancillary products used in the dialysis process. The Company’s drug products include Triferic (ferric pyrophosphate citrate) and Calcitriol (Active Vitamin D) Injection. Triferic is an iron compound that is delivered to hemodialysis patients through dialysate, replacing the iron loss that occurs during their dialysis treatment. Calcitriol (active vitamin D) injection is indicated for treatment of secondary hyperparathyroidism in dialysis patients.

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.

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