Dr. Reddy’s Laboratories (NYSE: RDY) is one of 112 public companies in the “Pharmaceuticals” industry, but how does it contrast to its rivals? We will compare Dr. Reddy’s Laboratories to related companies based on the strength of its dividends, valuation, earnings, profitability, risk, institutional ownership and analyst recommendations.

Volatility and Risk

Dr. Reddy’s Laboratories has a beta of 0.34, suggesting that its stock price is 66% less volatile than the S&P 500. Comparatively, Dr. Reddy’s Laboratories’ rivals have a beta of 0.86, suggesting that their average stock price is 14% less volatile than the S&P 500.

Profitability

This table compares Dr. Reddy’s Laboratories and its rivals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Dr. Reddy’s Laboratories 7.92% 9.27% 5.06%
Dr. Reddy’s Laboratories Competitors -3,612.23% -53.37% -8.67%

Institutional and Insider Ownership

15.3% of Dr. Reddy’s Laboratories shares are held by institutional investors. Comparatively, 43.5% of shares of all “Pharmaceuticals” companies are held by institutional investors. 2.0% of Dr. Reddy’s Laboratories shares are held by insiders. Comparatively, 12.1% of shares of all “Pharmaceuticals” companies are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Dr. Reddy’s Laboratories and its rivals top-line revenue, earnings per share and valuation.

Gross Revenue EBITDA Price/Earnings Ratio
Dr. Reddy’s Laboratories $2.20 billion $386.11 million 36.21
Dr. Reddy’s Laboratories Competitors $7.78 billion $2.46 billion 1.04

Dr. Reddy’s Laboratories’ rivals have higher revenue and earnings than Dr. Reddy’s Laboratories. Dr. Reddy’s Laboratories is trading at a higher price-to-earnings ratio than its rivals, indicating that it is currently more expensive than other companies in its industry.

Dividends

Dr. Reddy’s Laboratories pays an annual dividend of $0.29 per share and has a dividend yield of 0.8%. Dr. Reddy’s Laboratories pays out 27.9% of its earnings in the form of a dividend. As a group, “Pharmaceuticals” companies pay a dividend yield of 2.4% and pay out 82.4% of their earnings in the form of a dividend.

Analyst Recommendations

This is a summary of current recommendations and price targets for Dr. Reddy’s Laboratories and its rivals, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dr. Reddy’s Laboratories 1 1 2 0 2.25
Dr. Reddy’s Laboratories Competitors 944 3794 6013 164 2.49

Dr. Reddy’s Laboratories currently has a consensus target price of $31.62, suggesting a potential downside of 16.04%. As a group, “Pharmaceuticals” companies have a potential upside of 25.75%. Given Dr. Reddy’s Laboratories’ rivals stronger consensus rating and higher possible upside, analysts plainly believe Dr. Reddy’s Laboratories has less favorable growth aspects than its rivals.

Summary

Dr. Reddy’s Laboratories rivals beat Dr. Reddy’s Laboratories on 10 of the 15 factors compared.

Dr. Reddy’s Laboratories Company Profile

Dr. Reddy’s Laboratories Limited is a pharmaceutical company that is engaged in providing medicines. The Company operates in three segments: Global Generics, Pharmaceutical Services and Active Ingredients (PSAI), and Proprietary Products. The Global Generics segment includes manufacturing and marketing prescription and over-the-counter finished pharmaceutical products ready for consumption by the patient, marketed under a brand name (branded formulations) or as generic finished dosages with therapeutic equivalence to branded formulations (generics). PSAI segment includes the Company’s business of manufacturing and marketing active pharmaceutical ingredients and intermediates (API) or bulk drugs. Proprietary Products segment focuses on the research, development and manufacture of differentiated formulations and new chemical entities. These products fall within the dermatology and neurology therapeutic areas, and are marketed and sold through its subsidiary, Promius Pharma, LLC.

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