Critical Survey: Takeda Pharmaceutical (NYSE:TAK) and Ardelyx (NASDAQ:ARDX)

Ardelyx (NASDAQ:ARDX) and Takeda Pharmaceutical (NYSE:TAK) are both healthcare companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, earnings, analyst recommendations, dividends, profitability, institutional ownership and valuation.

Volatility and Risk

Ardelyx has a beta of 0.7, indicating that its stock price is 30% less volatile than the S&P 500. Comparatively, Takeda Pharmaceutical has a beta of -0.07, indicating that its stock price is 107% less volatile than the S&P 500.

Valuation & Earnings

This table compares Ardelyx and Takeda Pharmaceutical”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ardelyx	$450.89 million	1.89	-$61.60 million	($0.22)	-15.55
Takeda Pharmaceutical	$28.32 billion	2.14	-$1.01 billion	$0.34	55.66

Ardelyx has higher earnings, but lower revenue than Takeda Pharmaceutical. Ardelyx is trading at a lower price-to-earnings ratio than Takeda Pharmaceutical, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Ardelyx and Takeda Pharmaceutical’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ardelyx	-12.35%	-36.00%	-10.77%
Takeda Pharmaceutical	3.80%	10.95%	5.34%

Insider & Institutional Ownership

58.9% of Ardelyx shares are owned by institutional investors. Comparatively, 9.2% of Takeda Pharmaceutical shares are owned by institutional investors. 5.3% of Ardelyx shares are owned by company insiders. Comparatively, 0.0% of Takeda Pharmaceutical shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Ardelyx and Takeda Pharmaceutical, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ardelyx	2	0	9	1	2.75
Takeda Pharmaceutical	0	1	2	1	3.00

Ardelyx currently has a consensus target price of $13.90, indicating a potential upside of 306.43%. Given Ardelyx’s higher possible upside, equities analysts plainly believe Ardelyx is more favorable than Takeda Pharmaceutical.

Summary

Takeda Pharmaceutical beats Ardelyx on 8 of the 14 factors compared between the two stocks.

About Ardelyx

Ardelyx, Inc., a biopharmaceutical company, discovers, develops, and commercializes medicines to treat gastrointestinal and cardiorenal therapeutic areas in the United States and internationally. The company’s lead product candidate is tenapanor for the treatment of patients with irritable bowel syndrome with constipation. It also develops XPHOZAH, which is in Phase III clinical trial to reduce serum phosphorus in adults with chronic kidney disease (CKD)on dialysis, or hyperphosphatemia; RDX013, a potassium secretagogue, for the treatment of elevated serum potassium, or hyperkalemia, a problem among patients with kidney and/or heart failure; and RDX020, for adult patients with metabolic acidosis, a serious electrolyte disorder. The company has agreements with Kyowa Kirin, Fosun Pharmaceutical Industrial Development Co. Ltd., and Knight Therapeutics, Inc. for the development and commercialization of tenapanor in their respective territories. The company was formerly known as Nteryx, Inc. and changed its name to Ardelyx, Inc. in June 2008. Ardelyx, Inc. was incorporated in 2007 and is headquartered in Waltham, Massachusetts.

About Takeda Pharmaceutical

Takeda Pharmaceutical Company Limited engages in the research, development, manufacture, marketing, and out-licensing of pharmaceutical products in Japan and internationally. It offers pharmaceutical products in the areas of gastroenterology, rare diseases, plasma derived therapies, immunology, oncology, and neuroscience. The company provides its products under the Entyvio, Gattex/Revestive, Takecab/Vocinti, Alofisel, Dexilant, Pantoloc/Controloc, Adynovate/Adynovi, Feiba, Recombinate, Hemofil/Immunate/Immunine, Takhzyro, Livtencity, Elaprase, Replagal, Advate, Flexbumin, Vpriv, Gammagard Liquid/Kiovig, Hyqvia, Cuvitru, Exkivity, Ninlaro, Velcade, Azilva-F, Lotriga, Iclusig, Leuplin/Enantone, Adcetris, vyvanse/elvanse, Trintellix, and Alunbrig brands. It has in-license agreement with BioMarin, Luxna Biotech, GlaxoSmithKline, Halozyme, and Kamada; collaboration with Neurocrine Biosciences, Inc., Seagen Inc., Anima Biotech, Denali Therapeutics, KSQ Therapeutics, Noile-Immune Biotech, Center for iPS Cell Research Application, Kyoto University (CiRA), and Charles River Laboratories; licensing agreement with Mirum Pharmaceuticals and Twist Bioscience, UCSD/Fortis Advisors, PeptiDream, MD Anderson Cancer Center, Teva Pharmaceutical Industries, and Xenetic Biosciences; collaboration and licensing agreement with Arrowhead Pharmaceuticals Inc., Engitix, Genevant Sciences Corporation, Sosei Heptares, Zedira/Dr. Falk Pharma, Exelixis, Inc., GlaxoSmithKline, Heidelberg Pharma, HUTCHMED, Presage Biosciences, Codexis, Inc., Ensoma, Envozyne, KM Biologics, and Selecta BioScience, and Ovid Therapeutics Inc.; and collaboration with ZEDIRA GmbH and Dr. Falk Pharma GmbH. It has research collaboration and licensing agreement with Crescendo Biologics, Code Bio, Immusoft, Poseida Therapeutics, and Selecta Biosciences. The company was founded in 1781 and is headquartered in Tokyo, Japan.