Head-To-Head Review: Elite Pharmaceuticals (OTCMKTS:ELTP) & Ardelyx (NASDAQ:ARDX)

Ardelyx (NASDAQ:ARDX) and Elite Pharmaceuticals (OTCMKTS:ELTP) are both small-cap medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their earnings, institutional ownership, risk, analyst recommendations, profitability, valuation and dividends.

Profitability

This table compares Ardelyx and Elite Pharmaceuticals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Ardelyx	-13.58%	-38.11%	-11.85%
Elite Pharmaceuticals	30.14%	37.06%	21.67%

Insider and Institutional Ownership

58.9% of Ardelyx shares are owned by institutional investors. Comparatively, 0.0% of Elite Pharmaceuticals shares are owned by institutional investors. 5.3% of Ardelyx shares are owned by insiders. Comparatively, 14.4% of Elite Pharmaceuticals shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Ardelyx and Elite Pharmaceuticals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Ardelyx	1	0	9	1	2.91
Elite Pharmaceuticals	0	0	0	0	0.00

Ardelyx currently has a consensus price target of $15.73, suggesting a potential upside of 199.91%. Given Ardelyx’s stronger consensus rating and higher possible upside, equities research analysts plainly believe Ardelyx is more favorable than Elite Pharmaceuticals.

Valuation and Earnings

This table compares Ardelyx and Elite Pharmaceuticals”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Ardelyx	$407.32 million	3.18	-$61.60 million	($0.23)	-22.80
Elite Pharmaceuticals	$148.87 million	2.65	$44.87 million	$0.02	18.29

Elite Pharmaceuticals has lower revenue, but higher earnings than Ardelyx. Ardelyx is trading at a lower price-to-earnings ratio than Elite Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Ardelyx has a beta of 0.61, meaning that its share price is 39% less volatile than the S&P 500. Comparatively, Elite Pharmaceuticals has a beta of 0.39, meaning that its share price is 61% less volatile than the S&P 500.

Summary

Ardelyx beats Elite Pharmaceuticals on 8 of the 15 factors compared between the two stocks.

About Ardelyx

Ardelyx, Inc., a biopharmaceutical company, discovers, develops, and commercializes medicines to treat gastrointestinal and cardiorenal therapeutic areas in the United States and internationally. The company’s lead product candidate is tenapanor for the treatment of patients with irritable bowel syndrome with constipation. It also develops XPHOZAH, which is in Phase III clinical trial to reduce serum phosphorus in adults with chronic kidney disease (CKD)on dialysis, or hyperphosphatemia; RDX013, a potassium secretagogue, for the treatment of elevated serum potassium, or hyperkalemia, a problem among patients with kidney and/or heart failure; and RDX020, for adult patients with metabolic acidosis, a serious electrolyte disorder. The company has agreements with Kyowa Kirin, Fosun Pharmaceutical Industrial Development Co. Ltd., and Knight Therapeutics, Inc. for the development and commercialization of tenapanor in their respective territories. The company was formerly known as Nteryx, Inc. and changed its name to Ardelyx, Inc. in June 2008. Ardelyx, Inc. was incorporated in 2007 and is headquartered in Waltham, Massachusetts.

About Elite Pharmaceuticals

Elite Pharmaceuticals, Inc., a specialty pharmaceutical company, engages in the development, manufacture, and sale of oral, controlled-release products, and generic pharmaceuticals. The company operates in two segments, Abbreviated New Drug Applications for Generic Pharmaceuticals and New Drug Applications for Branded Pharmaceuticals. It owns, licenses, manufactures, and sells various generic and oral dose pharmaceuticals products, such as Phentermine HCl 37.5mg tablets, and 15mg and 30mg capsules for the treatment of bariatrics under Adipex-P brand; Phendimetrazine Tartrate 35mg tablets for bariatrics under the Bontril brand; Naltrexone HCl 50mg tablets for the treatment of pains under the Revia brand; and Isradipine 2.5mg and 5mg capsules for cardiovascular diseases. The company also provides Trimipramine Maleate Immediate Release antidepressant capsules under the Surmontil brand; Dextroamphetamine Saccharate, Amphetamine Aspartate, Dextroamphetamine Sulfate, and Amphetamine Sulfate Immediate Release tablets under the Adderall brand, as well as Dextroamphetamine Saccharate, Amphetamine Aspartate, Dextroamphetamine Sulfate, Amphetamine Sulfate Extended Release capsules under the Adderall XR brand for central nervous system diseases; Dantrolene Sodium capsules for muscle relaxant under the Dantrium brand; SequestOX, an immediate release Oxycodone with Naltrexone; Loxapine Succinate capsules for treating antipsychotic under the Loxapine brand; Acetaminophen and Codeine Phosphate for the management of mild to moderate pain; and antibiotic products. In addition, it manufactures controlled-release products on a contract basis for third parties in the areas of pain, allergy, bariatric, attention deficit, and infection. Further, the company is developing a range of abuse deterrent opioid products. Elite Pharmaceuticals, Inc. was incorporated in 1997 and is headquartered in Northvale, New Jersey.