Analyzing Bausch Health Cos (NYSE:BHC) and Dr. Reddy’s Laboratories (NYSE:RDY)

Bausch Health Cos (NYSE:BHC) and Dr. Reddy’s Laboratories (NYSE:RDY) are both medical companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, valuation, analyst recommendations, risk, profitability, institutional ownership and earnings.

Valuation and Earnings

This table compares Bausch Health Cos and Dr. Reddy’s Laboratories”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bausch Health Cos	$10.03 billion	0.25	-$46.00 million	$0.97	6.97
Dr. Reddy’s Laboratories	$342.15 billion	0.03	$663.00 million	$0.81	16.53

Dr. Reddy’s Laboratories has higher revenue and earnings than Bausch Health Cos. Bausch Health Cos is trading at a lower price-to-earnings ratio than Dr. Reddy’s Laboratories, indicating that it is currently the more affordable of the two stocks.

Risk and Volatility

Bausch Health Cos has a beta of 0.43, meaning that its share price is 57% less volatile than the S&P 500. Comparatively, Dr. Reddy’s Laboratories has a beta of 0.37, meaning that its share price is 63% less volatile than the S&P 500.

Profitability

This table compares Bausch Health Cos and Dr. Reddy’s Laboratories’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bausch Health Cos	0.99%	-852.36%	5.25%
Dr. Reddy’s Laboratories	17.14%	17.13%	11.57%

Insider & Institutional Ownership

78.7% of Bausch Health Cos shares are held by institutional investors. Comparatively, 3.8% of Dr. Reddy’s Laboratories shares are held by institutional investors. 20.0% of Bausch Health Cos shares are held by insiders. Comparatively, 2.0% of Dr. Reddy’s Laboratories shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of recent recommendations and price targets for Bausch Health Cos and Dr. Reddy’s Laboratories, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bausch Health Cos	0	3	0	0	2.00
Dr. Reddy’s Laboratories	0	2	2	1	2.80

Bausch Health Cos currently has a consensus price target of $9.00, indicating a potential upside of 33.20%. Dr. Reddy’s Laboratories has a consensus price target of $16.90, indicating a potential upside of 26.21%. Given Bausch Health Cos’ higher possible upside, analysts clearly believe Bausch Health Cos is more favorable than Dr. Reddy’s Laboratories.

Summary

Dr. Reddy’s Laboratories beats Bausch Health Cos on 8 of the 15 factors compared between the two stocks.

About Bausch Health Cos

Bausch Health Companies Inc. operates as a diversified specialty pharmaceutical and medical device company in the United States and internationally. It develops, manufactures, and markets a range of products primarily in gastroenterology, hepatology, neurology, dermatology, international pharmaceuticals, over-the-counter (OTC) products, aesthetic medical devices, and eye health. The company operates through five segments: Salix, International, Solta Medical, Diversified, and Bausch + Lomb. The Salix segment provides gastroenterology products in the United States. The International segment sells aesthetic medical devices, branded pharmaceuticals, generic pharmaceuticals, and OTC products internationally. The Solta Medical segment engages in the sale of aesthetic medical devices. The Diversified segment offers pharmaceutical products in the areas of neurology and certain other therapeutic classes; generic products; ortho dermatologic; and dentistry products in the United States. The Bausch + Lomb segment offers products in the areas of vision care, surgical, and ophthalmic pharmaceuticals products. The company was formerly known as Valeant Pharmaceuticals International, Inc. and changed its name to Bausch Health Companies Inc. in July 2018. Bausch Health Companies Inc. is headquartered in Laval, Canada.

About Dr. Reddy’s Laboratories

Dr. Reddy’s Laboratories Limited, together with its subsidiaries, operates as an integrated pharmaceutical company worldwide. It operates through Global Generics, Pharmaceutical Services and Active Ingredients (PSAI), and Others segments. The company’s Global Generics segment manufactures and markets prescription and over-the-counter finished pharmaceutical products that are marketed under a brand name or as a generic finished dosages with therapeutic equivalence to branded formulations, as well as engages in the biologics business. The PSAI segment manufactures and markets active pharmaceutical ingredients and intermediates, which are principal ingredients for finished pharmaceutical products. This segment also provides contract research services; and manufactures and sells active pharmaceutical ingredients and steroids in accordance with the specific customer requirements. The Others segment engages in developing therapies in the fields of oncology and inflammation; research and development of differentiated formulations; and provides digital healthcare and information technology enabled business support services. The company offers its products for various therapeutic categories primarily include gastro-intestinal, cardiovascular, anti-diabetic, dermatology, oncology, respiratory, stomatology, urology, and nephrology. Dr. Reddy’s Laboratories Limited was incorporated in 1984 and is headquartered in Hyderabad, India.