Royalty Pharma (NASDAQ:RPRX – Get Free Report) and Harrow (NASDAQ:HROW – Get Free Report) are both healthcare companies, but which is the better business? We will contrast the two businesses based on the strength of their analyst recommendations, dividends, profitability, risk, earnings, valuation and institutional ownership.
Valuation and Earnings
This table compares Royalty Pharma and Harrow”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Royalty Pharma | $2.38 billion | 15.05 | $770.95 million | $1.45 | 42.93 |
| Harrow | $272.30 million | 3.86 | -$5.14 million | ($1.00) | -28.07 |
Royalty Pharma has higher revenue and earnings than Harrow. Harrow is trading at a lower price-to-earnings ratio than Royalty Pharma, indicating that it is currently the more affordable of the two stocks.
Volatility and Risk
Royalty Pharma has a beta of 0.42, meaning that its stock price is 58% less volatile than the S&P 500. Comparatively, Harrow has a beta of 0.19, meaning that its stock price is 81% less volatile than the S&P 500.
Analyst Ratings
This is a summary of recent ratings for Royalty Pharma and Harrow, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Royalty Pharma | 0 | 0 | 8 | 0 | 3.00 |
| Harrow | 1 | 2 | 7 | 0 | 2.60 |
Royalty Pharma currently has a consensus price target of $61.57, suggesting a potential downside of 1.09%. Harrow has a consensus price target of $66.17, suggesting a potential upside of 135.72%. Given Harrow’s higher possible upside, analysts clearly believe Harrow is more favorable than Royalty Pharma.
Profitability
This table compares Royalty Pharma and Harrow’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Royalty Pharma | 32.14% | 30.01% | 14.91% |
| Harrow | -13.51% | -38.00% | -3.37% |
Insider and Institutional Ownership
54.3% of Royalty Pharma shares are owned by institutional investors. Comparatively, 72.8% of Harrow shares are owned by institutional investors. 18.8% of Royalty Pharma shares are owned by company insiders. Comparatively, 12.8% of Harrow shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.
Summary
Royalty Pharma beats Harrow on 11 of the 13 factors compared between the two stocks.
About Royalty Pharma
Royalty Pharma plc operates as a buyer of biopharmaceutical royalties and a funder of innovations in the biopharmaceutical industry in the United States. It is also involved in the identification, evaluation, and acquisition of royalties on various biopharmaceutical therapies. In addition, the company collaborates with innovators from academic institutions, research hospitals and not-for-profits, small and mid-cap biotechnology companies, and pharmaceutical companies. Its portfolio consists of royalties on approximately 35 commercial products and 14 development-stage product candidates that address various therapeutic areas, such as rare disease, cancer, neuroscience, immunology, respiratory, infectious disease, hematology, and diabetes. The company was founded in 1996 and is based in New York, New York.
About Harrow
Harrow, Inc. operates as an ophthalmic-focused healthcare company. The company owns ImprimisRx, an ophthalmology outsourcing and pharmaceutical compounding business. The company was formerly known as Imprimis Pharmaceuticals, Inc. and changed its name to Harrow Health, Inc. in December 2018. Harrow Health, Inc. was incorporated in 2006 and is headquartered in Nashville, Tennessee.
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