Nephros (NASDAQ:NEPH – Get Free Report) and Perrigo (NYSE:PRGO – Get Free Report) are both small-cap medical companies, but which is the better business? We will contrast the two companies based on the strength of their profitability, earnings, institutional ownership, dividends, valuation, analyst recommendations and risk.
Profitability
This table compares Nephros and Perrigo’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Nephros | 4.06% | 7.66% | 5.86% |
| Perrigo | -43.50% | 9.96% | 3.90% |
Valuation and Earnings
This table compares Nephros and Perrigo”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Nephros | $18.79 million | 1.96 | $1.19 million | $0.07 | 48.43 |
| Perrigo | $4.25 billion | 0.38 | -$1.43 billion | ($13.10) | -0.89 |
Nephros has higher earnings, but lower revenue than Perrigo. Perrigo is trading at a lower price-to-earnings ratio than Nephros, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of current ratings and recommmendations for Nephros and Perrigo, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Nephros | 0 | 1 | 1 | 0 | 2.50 |
| Perrigo | 1 | 4 | 1 | 0 | 2.00 |
Nephros presently has a consensus target price of $6.00, indicating a potential upside of 76.99%. Perrigo has a consensus target price of $19.33, indicating a potential upside of 66.72%. Given Nephros’ stronger consensus rating and higher probable upside, analysts plainly believe Nephros is more favorable than Perrigo.
Volatility and Risk
Nephros has a beta of 1.51, indicating that its share price is 51% more volatile than the S&P 500. Comparatively, Perrigo has a beta of 0.51, indicating that its share price is 49% less volatile than the S&P 500.
Insider and Institutional Ownership
41.1% of Nephros shares are held by institutional investors. Comparatively, 95.9% of Perrigo shares are held by institutional investors. 6.7% of Nephros shares are held by company insiders. Comparatively, 0.4% of Perrigo shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Summary
Nephros beats Perrigo on 10 of the 13 factors compared between the two stocks.
About Nephros
Nephros, Inc., a commercial-stage company, develops and sells water solutions to the medical and commercial markets in the United States. It offers ultrafiltration products that are used in dialysis centers for the removal of biological contaminants from water and bicarbonate concentrate; and in hospitals for the prevention of infection from waterborne pathogens, such as legionella and pseudomonas, as well as in military and outdoor recreation, commercial, and other healthcare facilities. The company also manufactures and sells water filters that enhance the taste and odor of water, as well as reduce biofilm, cysts, particulates, and scale build-up in downstream equipment. It markets its products to food service, hospitality, convenience store, and health care markets, as well as medical institutions. The company was incorporated in 1997 and is headquartered in South Orange, New Jersey.
About Perrigo
Perrigo Company plc provides over-the-counter health and wellness solutions to enhance individual well-being in the United States, Europe, and internationally. It operates through Consumer Self-Care Americas and Consumer Self-Care International segments. The company develops, manufactures, markets, and distributes self-care consumer products, such as upper respiratory products, including cough suppressants, expectorants, and sinus and allergy relief; nutrition products consisting of infant formulas and nutritional beverages; digestive health products, including antacids, anti-diarrheal, and anti-heartburn; pain and sleep-aids products comprising pain relievers and fever reducers; and oral care products, which include toothbrushes, toothbrush replacement heads, floss, flossers, whitening products, and toothbrush covers. It also offers healthy lifestyle products, such as smoking cessation, well-being, and weight management products; skin care products consisting of dermatological care, scar management, lice treatment, and other products for various skin conditions; women's health products comprising feminine hygiene and contraceptives; vitamins, minerals, and supplements; rare diseases business; and other miscellaneous self-care products. The company sells its products under the Compeed, Dr. Fresh, Firefly, Good Sense, Good Start, Mederma, Nasonex, Plackers, Prevacid24HR, REACH, Rembrandt, Steripod, Opill, Solpadeine, Coldrex, Physiomer, NiQuitin, ACO, ellaOne, Compeed Stops, XLS, Arterin, Davitamon, Apiserum, Abtei, and Nicorette brands. It also offers contract manufacturing services. The company sells its products through retail drug, supermarket, and mass merchandise chains; e-commerce stores; wholesalers; pharmacies; drug and grocery retailers; and para-pharmacies. The company was formerly known as Perrigo Company and changed its name to Perrigo Company plc in December 2013. Perrigo Company plc was founded in 1887 and is headquartered in Dublin, Ireland.
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