Innoviva (NASDAQ: INVA) and Female Health Company (The) (NASDAQ:VERU) are both small-cap medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their dividends, profitability, earnings, institutional ownership, risk, analyst recommendations and valuation.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Innoviva and Female Health Company (The), as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Innoviva 0 2 1 0 2.33
Female Health Company (The) 0 0 2 0 3.00

Innoviva presently has a consensus price target of $14.67, suggesting a potential upside of 1.22%. Female Health Company (The) has a consensus price target of $5.00, suggesting a potential upside of 120.26%. Given Female Health Company (The)’s stronger consensus rating and higher probable upside, analysts clearly believe Female Health Company (The) is more favorable than Innoviva.

Institutional and Insider Ownership

69.1% of Innoviva shares are owned by institutional investors. Comparatively, 5.0% of Female Health Company (The) shares are owned by institutional investors. 1.6% of Innoviva shares are owned by company insiders. Comparatively, 10.9% of Female Health Company (The) shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Valuation and Earnings

This table compares Innoviva and Female Health Company (The)’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Innoviva $175.98 million 9.00 $142.91 million $0.78 18.58
Female Health Company (The) N/A N/A N/A ($0.19) -11.95

Innoviva has higher revenue and earnings than Female Health Company (The). Female Health Company (The) is trading at a lower price-to-earnings ratio than Innoviva, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Innoviva and Female Health Company (The)’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Innoviva 52.56% -27.37% 24.45%
Female Health Company (The) -42.02% -16.78% -10.64%

Volatility and Risk

Innoviva has a beta of 2.6, suggesting that its share price is 160% more volatile than the S&P 500. Comparatively, Female Health Company (The) has a beta of 1.4, suggesting that its share price is 40% more volatile than the S&P 500.

Summary

Innoviva beats Female Health Company (The) on 6 of the 11 factors compared between the two stocks.

Innoviva Company Profile

Innoviva, Inc., formerly Theravance, Inc., is engaged in the development, commercialization and financial management of bio-pharmaceuticals. It focuses on the respiratory assets partnered with Glaxo Group Limited (GSK), including RELVAR/BREO ELLIPTA (fluticasone furoate (FF)/vilanterol (VI)) and ANORO ELLIPTA (umeclidinium bromide/vilanterol (UMEC/VI)). Under the Long-Acting Beta2 Agonist (LABA) Collaboration Agreement and the Strategic Alliance Agreement with GSK, the Company is eligible to receive the annual royalties from GSK on sales of RELVAR/BREO ELLIPTA. For other products combined with a LABA from the LABA collaboration, such as ANORO ELLIPTA, royalties are upward tiering and range from 6.5% to 10%. RELVAR/BREO is a once-a-day combination inhaled respiratory medicine consisting of a LABA (VI) and an inhaled corticosteroid (ICS), FF. ANORO ELLIPTA a once-daily medicine combining a long-acting muscarinic antagonist (LAMA), umeclidinium bromide (UMEC), with a LABA.

Female Health Company (The) Company Profile

Veru Inc., formerly The Female Health Company, is a therapeutics company focused on developing and commercializing pharmaceuticals and devices in men’s and women’s health and oncology. The Company is engaged in the development, manufacture and marketing of consumer healthcare products. The Company has three divisions: Pharmaceutical and Devices, Consumer Health Products and Public Sector. For men, product and product candidates are in the areas of benign prostatic hyperplasia, male infertility, amelioration of side effects of hormonal prostate cancer therapies, prostate cancer, gout and sexual dysfunction. Women’s Health has product candidates for female sexual health, and advanced breast and ovarian cancers. It manufactures, markets and sells the FC2 Female Condom. FC2 provides dual protection against unintended pregnancy and sexually transmitted infections (STIs), including human immunodeficiency virus/acquired immune deficiency syndrome (HIV/AIDS).

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