Aurora Cannabis (NASDAQ:ACB) versus Dr. Reddy’s Laboratories (NYSE:RDY) Critical Analysis

Dr. Reddy’s Laboratories (NYSE:RDY) and Aurora Cannabis (NASDAQ:ACB) are both healthcare companies, but which is the better stock? We will compare the two companies based on the strength of their earnings, risk, institutional ownership, profitability, dividends, analyst recommendations and valuation.

Analyst Recommendations

This is a breakdown of current ratings and recommmendations for Dr. Reddy’s Laboratories and Aurora Cannabis, 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
Aurora Cannabis	1	2	1	0	2.00

Dr. Reddy’s Laboratories currently has a consensus price target of $732.40, suggesting a potential upside of 5,446.80%. Given Dr. Reddy’s Laboratories’ stronger consensus rating and higher probable upside, research analysts plainly believe Dr. Reddy’s Laboratories is more favorable than Aurora Cannabis.

Risk & Volatility

Dr. Reddy’s Laboratories has a beta of 0.29, meaning that its share price is 71% less volatile than the S&P 500. Comparatively, Aurora Cannabis has a beta of 0.63, meaning that its share price is 37% less volatile than the S&P 500.

Valuation and Earnings

This table compares Dr. Reddy’s Laboratories and Aurora Cannabis”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dr. Reddy’s Laboratories	$3.58 billion	3.08	$456.00 million	$0.44	30.01
Aurora Cannabis	$314.07 million	0.81	-$88.13 million	($1.41)	-2.75

Dr. Reddy’s Laboratories has higher revenue and earnings than Aurora Cannabis. Aurora Cannabis 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.

Institutional and Insider Ownership

3.8% of Dr. Reddy’s Laboratories shares are held by institutional investors. Comparatively, 47.6% of Aurora Cannabis shares are held by institutional investors. 2.0% of Dr. Reddy’s Laboratories shares are held by company insiders. Comparatively, 0.0% of Aurora Cannabis shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company is poised for long-term growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Dr. Reddy’s Laboratories	10.15%	9.49%	6.32%
Aurora Cannabis	-32.26%	4.37%	3.45%

Summary

Dr. Reddy’s Laboratories beats Aurora Cannabis on 12 of the 14 factors compared between the two stocks.

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.

About Aurora Cannabis

Aurora Cannabis Inc., together with its subsidiaries, produces, distributes, and sells cannabis and cannabis-derivative products in Canada and internationally. It operates through three segments: Canadian Cannabis, European Cannabis, and Plant Propagation. The company produces, distributes, and sells medical and consumer cannabis products in Canada. It is also involved in the distribution of wholesale medical cannabis in the European Union (EU); distribution of wholesale medical cannabis in various international markets, including Australia, the Caribbean, South America, and Israel; supply of propagated vegetables and ornamental plants in North America; and distribution and sale of hemp-derived cannabidiol (CBD) products. In addition, the company cultivates and sells dried cannabis, cannabis oils, capsules, edible cannabis, cannabis extracts, and soft gels, which are ingested in various ways, including smoking, vaporizing, and consumption in the form of oil, capsules, edibles, and extracts; and provides dried flowers, vapes, dried milled strains, strain-specific extracts, strain specific cannabis oils, and concentrates. Further, it offers recreational cannabis products, such as flowers, vapes, ingestibles, concentrates, extracts, and CBD products; and patient counseling and outreach services. The company's adult-use brand portfolio includes Aurora Drift, San Rafael '71, Daily Special, Whistler, Being, and Greybeard, as well as CBD brands, Reliva and KG7; and medical cannabis brands include MedReleaf, CanniMed, Aurora, Whistler Medical Marijuana Co, Pedanios, Bidiol, and CraftPlant. Aurora Cannabis Inc. is headquartered in Edmonton, Canada.