Dr. Reddy’s Laboratories (NYSE:RDY – Get Free Report) and Neurocrine Biosciences (NASDAQ:NBIX – Get Free Report) are both large-cap healthcare companies, but which is the better investment? We will contrast the two companies based on the strength of their analyst recommendations, risk, institutional ownership, profitability, earnings, dividends and valuation.
Earnings & Valuation
This table compares Dr. Reddy’s Laboratories and Neurocrine Biosciences”s top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Dr. Reddy’s Laboratories | $329.84 billion | 0.04 | $456.00 million | $0.37 | 38.23 |
| Neurocrine Biosciences | $3.37 billion | 4.38 | $478.60 million | $6.82 | 21.34 |
Neurocrine Biosciences has lower revenue, but higher earnings than Dr. Reddy’s Laboratories. Neurocrine Biosciences 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.
Insider and Institutional Ownership
3.8% of Dr. Reddy’s Laboratories shares are held by institutional investors. Comparatively, 92.6% of Neurocrine Biosciences shares are held by institutional investors. 2.0% of Dr. Reddy’s Laboratories shares are held by company insiders. Comparatively, 4.6% of Neurocrine Biosciences shares are held 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.
Analyst Ratings
This is a breakdown of recent ratings and target prices for Dr. Reddy’s Laboratories and Neurocrine Biosciences, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Dr. Reddy’s Laboratories | 1 | 3 | 2 | 0 | 2.17 |
| Neurocrine Biosciences | 0 | 4 | 19 | 1 | 2.88 |
Dr. Reddy’s Laboratories presently has a consensus price target of $492.90, indicating a potential upside of 3,384.62%. Neurocrine Biosciences has a consensus price target of $201.14, indicating a potential upside of 38.21%. Given Dr. Reddy’s Laboratories’ higher possible upside, equities analysts plainly believe Dr. Reddy’s Laboratories is more favorable than Neurocrine Biosciences.
Profitability
This table compares Dr. Reddy’s Laboratories and Neurocrine Biosciences’ net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Dr. Reddy’s Laboratories | 8.56% | 7.89% | 5.25% |
| Neurocrine Biosciences | 20.91% | 22.43% | 15.64% |
Risk and Volatility
Dr. Reddy’s Laboratories has a beta of 0.29, suggesting that its stock price is 71% less volatile than the S&P 500. Comparatively, Neurocrine Biosciences has a beta of 0.4, suggesting that its stock price is 60% less volatile than the S&P 500.
Summary
Neurocrine Biosciences beats Dr. Reddy’s Laboratories on 12 of the 15 factors compared between the two stocks.
About Dr. Reddy’s Laboratories
Dr. Reddy’s Laboratories Limited, together with its subsidiaries, operates as an integrated pharmaceutical company worldwide. It operates through Global Generics, Pharmaceutical Services and Active Ingredients (PSAI), and Others segments. The company’s Global Generics segment manufactures and markets prescription and over-the-counter finished pharmaceutical products that are marketed under a brand name or as a generic finished dosages with therapeutic equivalence to branded formulations, as well as engages in the biologics business. The PSAI segment manufactures and markets active pharmaceutical ingredients and intermediates, which are principal ingredients for finished pharmaceutical products. This segment also provides contract research services; and manufactures and sells active pharmaceutical ingredients and steroids in accordance with the specific customer requirements. The Others segment engages in developing therapies in the fields of oncology and inflammation; research and development of differentiated formulations; and provides digital healthcare and information technology enabled business support services. The company offers its products for various therapeutic categories primarily include gastro-intestinal, cardiovascular, anti-diabetic, dermatology, oncology, respiratory, stomatology, urology, and nephrology. Dr. Reddy’s Laboratories Limited was incorporated in 1984 and is headquartered in Hyderabad, India.
About Neurocrine Biosciences
Neurocrine Biosciences, Inc. discovers, develops, and markets pharmaceuticals for neurological, neuroendocrine, and neuropsychiatric disorders in the United States and internationally. The company’s products include INGREZZA for tardive dyskinesia and chorea associated with Huntington’s disease; ALKINDI for adrenal insufficiency; Efmody capsules for classic congenital adrenal hyperplasia; Orilissa tablets for endometriosis; and Oriahnn capsules to treat uterine fibroids. Its product candidates in clinical development include valbenazine to treat dyskinetic cerebral palsy in pediatrics and adults; NBI-921352 to treat developmental and epileptic encephalopathy syndrome in pediatrics and adults; NBI-827104 to treat epileptic encephalopathy with continuous spike-and-wave during sleep; NBI-1076986 to treat movement disorders; crinecerfront to treat congenital adrenal hyperplasia in adults and children; EFMODY to treat congenital adrenal hyperplasia and adrenal insufficiency in adults; valbenazine for the adjunctive treatment of schizophrenia; NBI-1065845 for the treatment of inadequate response to treatment in major depressive disorder; luvadaxistat to treat cognitive impairment related to schizophrenia; NBI-1117568 for the treatment of schizophrenia; NBI-1070770 to treat major depressive disorder; NBI-1117570 for the treatment of symptoms of psychosis and cognition in neurological and neuropsychiatric conditions; and NBI-1117569, NBI-1117567, and NBI-1065890 to treat CNS indications. The company also has license and collaboration agreements with Heptares Therapeutics Limited; Takeda Pharmaceutical Company Limited; Idorsia Pharmaceuticals Ltd; Xenon Pharmaceuticals Inc.; Voyager Therapeutics, Inc.; BIAL Portela & Ca, S.A.; Mitsubishi Tanabe Pharma Corporation; and AbbVie Inc. The company was incorporated in 1992 and is headquartered in San Diego, California.
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