XenoPort (NASDAQ: XNPT) and Abbott Laboratories (NYSE:ABT) are both healthcare companies, but which is the better business? We will contrast the two companies based on the strength of their institutional ownership, earnings, analyst recommendations, risk, profitability, dividends and valuation.

Institutional and Insider Ownership

71.5% of Abbott Laboratories shares are held by institutional investors. 0.8% of Abbott Laboratories shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares XenoPort and Abbott Laboratories’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
XenoPort -103.12% -414.36% -37.19%
Abbott Laboratories 4.96% 14.43% 6.47%

Volatility and Risk

XenoPort has a beta of 1.94, suggesting that its share price is 94% more volatile than the S&P 500. Comparatively, Abbott Laboratories has a beta of 1.06, suggesting that its share price is 6% more volatile than the S&P 500.

Valuation and Earnings

This table compares XenoPort and Abbott Laboratories’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
XenoPort N/A N/A N/A N/A N/A
Abbott Laboratories $23.61 billion 4.02 $5.14 billion $0.71 76.94

Abbott Laboratories has higher revenue and earnings than XenoPort.

Analyst Recommendations

This is a breakdown of recent ratings for XenoPort and Abbott Laboratories, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
XenoPort 0 0 0 0 N/A
Abbott Laboratories 0 5 9 0 2.64

Abbott Laboratories has a consensus target price of $55.50, indicating a potential upside of 1.59%. Given Abbott Laboratories’ higher possible upside, analysts clearly believe Abbott Laboratories is more favorable than XenoPort.

Dividends

Abbott Laboratories pays an annual dividend of $1.06 per share and has a dividend yield of 1.9%. XenoPort does not pay a dividend. Abbott Laboratories pays out 149.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. XenoPort has raised its dividend for 44 consecutive years.

Summary

Abbott Laboratories beats XenoPort on 9 of the 12 factors compared between the two stocks.

XenoPort Company Profile

XenoPort, Inc. is a biopharmaceutical company. The Company is focused on commercializing HORIZANT (gabapentin enacarbil) Extended-Release Tablets in the United States. The Company’s segment is the development and commercialization of product candidates for the treatment of neurological and other disorders. Its development-stage product candidates include XP23829, XP21279 and arbaclofen placarbil. HORIZANT has been approved by the United States Food and Drug Administration for the treatment of moderate-to-severe primary restless legs syndrome in adults and for the management of postherpetic neuralgia in adults. XP23829 is a fumaric acid ester compound and a prodrug of metabolite monomethyl fumarate being developed for the treatment for patients with moderate-to-severe chronic plaque-type psoriasis and/or patients with relapsing forms of multiple sclerosis. XP21279 is a Transported Prodrug of levodopa being developed for the treatment for patients with idiopathic Parkinson’s disease.

Abbott Laboratories Company Profile

Abbott Laboratories is engaged in the discovery, development, manufacture and sale of a range of healthcare products. The Company operates through four segments: Established Pharmaceutical Products, Diagnostic Products, Nutritional Products and Vascular Products. Its Established Pharmaceutical Products include a range of branded generic pharmaceuticals manufactured around the world and marketed and sold outside the United States. Its Diagnostic Products include a range of diagnostic systems and tests. Its Nutritional Products include a range of pediatric and adult nutritional products. Its Company’s Vascular Products include a range of coronary, endovascular, vessel closure and structural heart devices for the treatment of vascular disease. The Company, through St. Jude Medical, Inc., also offers products, such as rhythm management products, electrophysiology products, heart failure related products, vascular products, structural heart products and neuromodulation products.

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