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

Dividends

AbbVie pays an annual dividend of $2.56 per share and has a dividend yield of 2.9%. Eagle Pharmaceuticals does not pay a dividend. AbbVie pays out 62.9% of its earnings in the form of a dividend. AbbVie has raised its dividend for 44 consecutive years.

Profitability

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

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

Institutional & Insider Ownership

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

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
AbbVie $26.71 billion 5.22 $11.57 billion $4.07 21.48
Eagle Pharmaceuticals $245.88 million 3.51 $83.99 million $5.95 9.57

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.

Risk and Volatility

AbbVie has a beta of 1.48, indicating that its stock price is 48% more volatile than the S&P 500. Comparatively, Eagle Pharmaceuticals has a beta of 1.3, indicating that its stock price is 30% more volatile than the S&P 500.

Analyst Recommendations

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

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AbbVie 0 6 7 0 2.54
Eagle Pharmaceuticals 1 0 3 0 2.50

AbbVie presently has a consensus price target of $83.75, suggesting a potential downside of 4.19%. Eagle Pharmaceuticals has a consensus price target of $72.50, suggesting a potential upside of 27.33%. Given Eagle Pharmaceuticals’ higher possible upside, analysts clearly believe Eagle Pharmaceuticals is more favorable than AbbVie.

Summary

AbbVie beats Eagle Pharmaceuticals on 11 of the 17 factors compared between the two stocks.

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).

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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