Forest Laboratories (NYSE: FRX) and Amgen (NASDAQ:AMGN) are both healthcare companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, institutional ownership, dividends, risk, profitability, analyst recommendations and valuation.

Analyst Ratings

This is a summary of recent ratings for Forest Laboratories and Amgen, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Forest Laboratories 0 0 0 0 N/A
Amgen 0 10 9 0 2.47

Amgen has a consensus price target of $190.89, indicating a potential upside of 7.82%.

Institutional & Insider Ownership

78.6% of Amgen shares are held by institutional investors. 0.2% of Amgen shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Valuation & Earnings

This table compares Forest Laboratories and Amgen’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Forest Laboratories N/A N/A N/A N/A N/A
Amgen $22.99 billion 5.59 $7.72 billion $11.05 16.02

Amgen has higher revenue and earnings than Forest Laboratories.

Dividends

Amgen pays an annual dividend of $4.60 per share and has a dividend yield of 2.6%. Forest Laboratories does not pay a dividend. Amgen pays out 41.6% of its earnings in the form of a dividend. Amgen has raised its dividend for 6 consecutive years.

Profitability

This table compares Forest Laboratories and Amgen’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Forest Laboratories N/A N/A N/A
Amgen 35.54% 29.90% 11.80%

Summary

Amgen beats Forest Laboratories on 9 of the 10 factors compared between the two stocks.

Forest Laboratories Company Profile

Forest Laboratories, Inc. (Forest), develops, manufactures and sells branded forms of ethical drug products, which requires a physician’s prescription. The Company’s products include Namenda, a N-methyl-D-aspartate (NMDA) antagonist for the treatment of moderate to severe dementia of the Alzheimer’s type; Bystolic, a beta-blocker for the treatment of hypertension; Linzess, a guanylate cyclase type-C receptor agonist for the once-daily treatment for men and women suffering from IBS-C or CIC; Tudorza, a long-acting antimuscarinic agent for the long-term maintenance treatment of bronchospasm associated with chronic obstructive pulmonary disease (COPD), including chronic bronchitis and emphysema, and Viibryd, a SSRI and a 5-HT1A receptor partial agonist for the treatment of adults with depressive disorder (MDD). In February 2014, it acquired Aptalis. Effective July 2, 2014 Forest Laboratories Inc, a unit of Actavis PLC, acquired the entire share capital of Furiex Pharmaceuticals Inc.

Amgen Company Profile

Amgen Inc. is a biotechnology company. The Company discovers, develops, manufactures and delivers various human therapeutics. It operates in human therapeutics segment. Its marketed products portfolio includes Neulasta (pegfilgrastim); erythropoiesis-stimulating agents (ESAs), such as Aranesp (darbepoetin alfa) and EPOGEN (epoetin alfa); Sensipar/Mimpara (cinacalcet); XGEVA (denosumab); Prolia (denosumab); NEUPOGEN (filgrastim), and other marketed products, such as KYPROLIS (carfilzomib), Vectibix (panitumumab), Nplate (romiplostim), Repatha (evolocumab), BLINCYTO (blinatumomab), IMLYGIC (talimogene laherparepvec) and Corlanor (ivabradine). It focuses on human therapeutics for the treatment of serious illness in the areas of oncology/hematology, cardiovascular disease and neuroscience. Its product candidates in Phase III include Erenumab for episodic migraine, Aranesp for myelodysplastic syndromes, BLINCYTO for acute lymphoblastic leukemia and IMLYGIC for metastatic melanoma.

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