Dr. Reddy’s Laboratories (NYSE: RDY) and Sagent Pharmaceuticals (NASDAQ:SGNT) are both medical companies, but which is the better business? We will contrast the two businesses based on the strength of their dividends, analyst recommendations, risk, valuation, profitability, institutional ownership and earnings.

Analyst Recommendations

This is a breakdown of current ratings for Dr. Reddy’s Laboratories and Sagent Pharmaceuticals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dr. Reddy’s Laboratories 1 1 2 0 2.25
Sagent Pharmaceuticals 0 0 0 0 N/A

Dr. Reddy’s Laboratories presently has a consensus target price of $30.51, indicating a potential downside of 14.32%. Given Dr. Reddy’s Laboratories’ higher probable upside, equities analysts plainly believe Dr. Reddy’s Laboratories is more favorable than Sagent Pharmaceuticals.

Dividends

Dr. Reddy’s Laboratories pays an annual dividend of $0.29 per share and has a dividend yield of 0.8%. Sagent Pharmaceuticals does not pay a dividend. Dr. Reddy’s Laboratories pays out 28.2% of its earnings in the form of a dividend.

Profitability

This table compares Dr. Reddy’s Laboratories and Sagent Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dr. Reddy’s Laboratories 7.91% 9.10% 5.03%
Sagent Pharmaceuticals -0.72% -0.81% -0.59%

Insider & Institutional Ownership

15.1% of Dr. Reddy’s Laboratories shares are held by institutional investors. 2.0% of Dr. Reddy’s Laboratories shares are held 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.

Earnings & Valuation

This table compares Dr. Reddy’s Laboratories and Sagent Pharmaceuticals’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Dr. Reddy’s Laboratories $2.17 billion 2.72 $186.00 million $1.03 34.57
Sagent Pharmaceuticals N/A N/A N/A ($0.77) -28.26

Dr. Reddy’s Laboratories has higher revenue and earnings than Sagent Pharmaceuticals. Sagent Pharmaceuticals is trading at a lower price-to-earnings ratio than Dr. Reddy’s Laboratories, indicating that it is currently the more affordable of the two stocks.

Summary

Dr. Reddy’s Laboratories beats Sagent Pharmaceuticals on 10 of the 11 factors compared between the two stocks.

About Dr. Reddy’s Laboratories

Dr. Reddy’s Laboratories Limited is a pharmaceutical company that is engaged in providing medicines. The Company operates in three segments: Global Generics, Pharmaceutical Services and Active Ingredients (PSAI), and Proprietary Products. The Global Generics segment includes manufacturing and marketing prescription and over-the-counter finished pharmaceutical products ready for consumption by the patient, marketed under a brand name (branded formulations) or as generic finished dosages with therapeutic equivalence to branded formulations (generics). PSAI segment includes the Company’s business of manufacturing and marketing active pharmaceutical ingredients and intermediates (API) or bulk drugs. Proprietary Products segment focuses on the research, development and manufacture of differentiated formulations and new chemical entities. These products fall within the dermatology and neurology therapeutic areas, and are marketed and sold through its subsidiary, Promius Pharma, LLC.

About Sagent Pharmaceuticals

Sagent Pharmaceuticals, Inc. is a specialty and generic pharmaceutical company. The Company is a provider of pharmaceuticals to the hospital market, which it sells primarily throughout North America. It is focused on developing, manufacturing, sourcing and marketing injectable pharmaceutical products to the hospital market. It operates through two segments: Sagent US, consisting of the Company’s operations in the United States and the Sagent (China) Pharmaceuticals Co. Ltd. (SCP) manufacturing facility, and Omega, which is focused on the Canadian and international markets. It offers a range of products across anti-infective, oncology and critical care indications in a range of presentations, including single and multi-dose vials, pre-filled ready-to-use syringes and premix bags. Its Sagent US product portfolio includes approximately 60 marketed products that it offers in over 180 presentations, and its Omega segment offers over 50 products.

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