NephroGenex (OTCMKTS: NRXGQ) and Allergan (NYSE:AGN) are both healthcare companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, dividends, institutional ownership, risk and earnings.

Insider and Institutional Ownership

81.3% of Allergan shares are owned by institutional investors. 0.4% of Allergan shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Dividends

Allergan pays an annual dividend of $2.80 per share and has a dividend yield of 1.7%. NephroGenex does not pay a dividend. Allergan pays out -12.4% of its earnings in the form of a dividend.

Profitability

This table compares NephroGenex and Allergan’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
NephroGenex N/A -211.97% -105.90%
Allergan -47.27% 8.00% 4.45%

Analyst Ratings

This is a breakdown of recent ratings and price targets for NephroGenex and Allergan, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
NephroGenex 0 0 1 0 3.00
Allergan 0 7 11 0 2.61

NephroGenex currently has a consensus target price of $17.50, indicating a potential upside of 624,900.00%. Allergan has a consensus target price of $234.82, indicating a potential upside of 40.17%. Given NephroGenex’s stronger consensus rating and higher probable upside, equities analysts plainly believe NephroGenex is more favorable than Allergan.

Volatility & Risk

NephroGenex has a beta of -0.98, meaning that its share price is 198% less volatile than the S&P 500. Comparatively, Allergan has a beta of 1.11, meaning that its share price is 11% more volatile than the S&P 500.

Earnings and Valuation

This table compares NephroGenex and Allergan’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
NephroGenex N/A N/A N/A ($2.32) 0.00
Allergan $14.57 billion 3.82 $14.97 billion ($22.59) -7.42

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

Summary

Allergan beats NephroGenex on 9 of the 13 factors compared between the two stocks.

About NephroGenex

NephroGenex, Inc. is a pharmaceutical company. The Company is focused on the development of therapeutics to treat kidney disease. The Company has paused the clinical program of its product candidate, oral Pyridorin, for the treatment of diabetic nephropathy. The Company was primarily focused on the Phase III Pyridorin program, and other planned clinical and nonclinical studies and other work needed to submit Pyridorin for acute kidney injury (AKI), as well as the treatment of diabetic nephropathy in patients with Type II diabetes for regulatory approval in the United States and Europe. The Company has not generated any revenues.

About Allergan

Allergan, Inc. is a multi-specialty healthcare company. The Company focuses on developing and commercializing pharmaceuticals, biologics, medical devices and over-the-counter (OTC) products. It discovers, develops and commercializes a range of products for the ophthalmic, neurological, medical aesthetics, medical dermatology, breast aesthetics, urological and other specialty markets. The Company operates in two segments: specialty pharmaceuticals and medical devices. The specialty pharmaceuticals segment produces products, including ophthalmic products for dry eye, glaucoma, inflammation, infection, allergy and retinal disease; Botox for therapeutic and aesthetic indications; skin care products for acne, psoriasis, eyelash growth and prescription and OTC skin care products, and urologics products. The medical devices segment produces medical devices, including breast implants for augmentation, revision and reconstructive surgery and tissue expanders, and facial aesthetics products.

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