Owens & Minor (NYSE:OMI) and Dr. Reddy's Laboratories (NYSE:RDY) are both medical companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, risk, dividends and institutional ownership.
Earnings and Valuation
This table compares Owens & Minor and Dr. Reddy's Laboratories' top-line revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
|---|
| Owens & Minor | $9.21 billion | 0.30 | $-62,370,000.00 | $0.56 | 67.09 |
| Dr. Reddy's Laboratories | $2.32 billion | 4.67 | $259 million | $2.79 | 23.30 |
Dr. Reddy's Laboratories has lower revenue, but higher earnings than Owens & Minor. Dr. Reddy's Laboratories is trading at a lower price-to-earnings ratio than Owens & Minor, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of recent recommendations and price targets for Owens & Minor and Dr. Reddy's Laboratories, as reported by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
|---|
| Owens & Minor | 0 | 5 | 4 | 0 | 2.44 |
| Dr. Reddy's Laboratories | 0 | 0 | 4 | 0 | 3.00 |
Owens & Minor presently has a consensus price target of $27.2778, suggesting a potential downside of 27.39%. Dr. Reddy's Laboratories has a consensus price target of $70.00, suggesting a potential upside of 7.68%. Given Dr. Reddy's Laboratories' stronger consensus rating and higher possible upside, analysts clearly believe Dr. Reddy's Laboratories is more favorable than Owens & Minor.
Risk and Volatility
Owens & Minor has a beta of 0.26, indicating that its share price is 74% less volatile than the S&P 500. Comparatively, Dr. Reddy's Laboratories has a beta of 0.41, indicating that its share price is 59% less volatile than the S&P 500.
Profitability
This table compares Owens & Minor and Dr. Reddy's Laboratories' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
|---|
| Owens & Minor | -0.72% | 18.07% | 2.26% |
| Dr. Reddy's Laboratories | 8.23% | 16.33% | 10.79% |
Insider & Institutional Ownership
73.0% of Owens & Minor shares are owned by institutional investors. Comparatively, 12.9% of Dr. Reddy's Laboratories shares are owned by institutional investors. 2.2% of Owens & Minor shares are owned by insiders. Comparatively, 2.0% of Dr. Reddy's Laboratories shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.
Dividends
Owens & Minor pays an annual dividend of $0.01 per share and has a dividend yield of 0.0%. Dr. Reddy's Laboratories pays an annual dividend of $0.27 per share and has a dividend yield of 0.4%. Owens & Minor pays out 1.8% of its earnings in the form of a dividend. Dr. Reddy's Laboratories pays out 9.7% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Owens & Minor has raised its dividend for 1 consecutive years.
Summary
Dr. Reddy's Laboratories beats Owens & Minor on 10 of the 16 factors compared between the two stocks.
