AbbVie (NYSE: ABBV) and DARA Biosciences (NASDAQ:DARA) are both medical companies, but which is the better business? We will contrast the two businesses based on the strength of their profitability, earnings, risk, dividends, analyst recommendations, institutional ownership and valuation.

Insider and Institutional Ownership

67.7% of AbbVie shares are owned by institutional investors. 0.2% of AbbVie shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

AbbVie pays an annual dividend of $2.56 per share and has a dividend yield of 2.7%. DARA Biosciences does not pay a dividend. AbbVie pays out 62.3% of its earnings in the form of a dividend. DARA Biosciences has increased its dividend for 44 consecutive years.

Profitability

This table compares AbbVie and DARA Biosciences’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
AbbVie 24.38% 153.80% 12.83%
DARA Biosciences -228.42% -145.61% -100.38%

Volatility and Risk

AbbVie has a beta of 1.51, suggesting that its stock price is 51% more volatile than the S&P 500. Comparatively, DARA Biosciences has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for AbbVie and DARA Biosciences, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AbbVie 0 6 10 0 2.63
DARA Biosciences 0 0 0 0 N/A

AbbVie presently has a consensus target price of $95.60, suggesting a potential upside of 1.20%. Given AbbVie’s higher possible upside, research analysts plainly believe AbbVie is more favorable than DARA Biosciences.

Earnings and Valuation

This table compares AbbVie and DARA Biosciences’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
AbbVie $25.64 billion 5.88 $5.95 billion $4.11 22.99
DARA Biosciences N/A N/A N/A ($0.52) -0.63

AbbVie has higher revenue and earnings than DARA Biosciences. DARA Biosciences is trading at a lower price-to-earnings ratio than AbbVie, indicating that it is currently the more affordable of the two stocks.

Summary

AbbVie beats DARA Biosciences on 11 of the 13 factors compared between the two stocks.

About AbbVie

AbbVie Inc. (AbbVie) is a research-based biopharmaceutical company. The Company is engaged in the discovery, development, manufacture and sale of a range of pharmaceutical products. Its products are focused on treating conditions, such as chronic autoimmune diseases in rheumatology, gastroenterology and dermatology; oncology, including blood cancers; virology, including hepatitis C virus (HCV) and human immunodeficiency virus (HIV); neurological disorders, such as Parkinson’s disease and multiple sclerosis; metabolic diseases, including thyroid disease and complications associated with cystic fibrosis, and other serious health conditions. It offers products in various categories, including HUMIRA (adalimumab), Oncology products, Virology Products, Additional Virology products, Metabolics/Hormones products, Endocrinology products and other products, which include Duopa and Duodopa (carbidopa and levodopa), Anesthesia products and ZINBRYTA (daclizumab).

About DARA Biosciences

DARA BioSciences Inc is specialty pharmaceutical company based in the United States. The Company’s primary focus is on the commercialization of oncology treatment and oncology supportive care pharmaceutical products, including Soltamox, an oral solution of tamoxifen citrate; cancer support therapeutics, including Gelclair, indicated for the treatment of oral mucositis and Bionect, for the management of irritation of the skin as well as first and second degree burns, and Three Mission Pharmacal products, including Ferralet 90 (for anemia), Binosto (alendronate sodium effervescent tablet indicated for the treatment of osteoporosis) and Aquoral (for cancer related dry mouth). The Company has a clinical development asset, KRN5500, which is a Phase II product candidate targeted for treating cancer patients with painful treatment-refractory chronic chemotherapy induced peripheral neuropathy. The Company is a subsidiary of Midatech Pharma Plc.

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