Critical Analysis: Teligent (TLGT) vs. Dr.Reddy's Laboratories (RDY)

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

Earnings & Valuation

This table compares Teligent and Dr.Reddy's Laboratories’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Teligent $66.88 million 2.79 -$11.98 million ($0.22) -15.91
Dr.Reddy's Laboratories $2.17 billion 2.96 $186.00 million $1.03 37.65

Dr.Reddy's Laboratories has higher revenue and earnings than Teligent. Teligent 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.

Profitability

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

Net Margins Return on Equity Return on Assets
Teligent -16.95% -6.51% -1.92%
Dr.Reddy's Laboratories 7.91% 9.10% 5.03%

Volatility & Risk

Teligent has a beta of 1.34, meaning that its share price is 34% more volatile than the S&P 500. Comparatively, Dr.Reddy's Laboratories has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500.

Dividends

Dr.Reddy's Laboratories pays an annual dividend of $0.29 per share and has a dividend yield of 0.7%. Teligent does not pay a dividend. Dr.Reddy's Laboratories pays out 28.2% of its earnings in the form of a dividend.

Analyst Ratings

This is a summary of current ratings and target prices for Teligent and Dr.Reddy's Laboratories, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Teligent 0 2 1 0 2.33
Dr.Reddy's Laboratories 1 1 2 0 2.25

Teligent presently has a consensus price target of $7.00, indicating a potential upside of 100.00%. Dr.Reddy's Laboratories has a consensus price target of $30.51, indicating a potential downside of 21.33%. Given Teligent’s stronger consensus rating and higher probable upside, equities analysts clearly believe Teligent is more favorable than Dr.Reddy's Laboratories.

Insider and Institutional Ownership

70.8% of Teligent shares are held by institutional investors. Comparatively, 13.7% of Dr.Reddy's Laboratories shares are held by institutional investors. 22.6% of Teligent shares are held by company insiders. Comparatively, 2.0% of Dr.Reddy's Laboratories shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Dr.Reddy's Laboratories beats Teligent on 10 of the 16 factors compared between the two stocks.

About Teligent

Teligent, Inc. is a specialty generic pharmaceutical company. Under the Company’s own label, it markets and sells generic injectable pharmaceutical products in the United States and Canada. In the United States it marketed 16 generic topical pharmaceutical products and four branded generic pharmaceutical products, as of December 31, 2016. It provides development, formulation and manufacturing services to the pharmaceutical, over-the-counter (OTC) and cosmetic industries. It focuses on developing, manufacturing and marketing a portfolio of generic pharmaceutical products under its own label in topical, injectable, complex and ophthalmic dosage forms, and managing its contract manufacturing and formulation services business. Its pipeline included 34 Abbreviated New Drug Application(ANDAs) filed with the United States Food and Drug Administration (FDA) for additional pharmaceutical products, as of December 31, 2016.

About Dr.Reddy's Laboratories

Dr. Reddy’s Laboratories Limited is a pharmaceutical company that is engaged in providing medicines. The Company operates in three segments: Global Generics, Pharmaceutical Services and Active Ingredients (PSAI), and Proprietary Products. The Global Generics segment includes manufacturing and marketing prescription and over-the-counter finished pharmaceutical products ready for consumption by the patient, marketed under a brand name (branded formulations) or as generic finished dosages with therapeutic equivalence to branded formulations (generics). PSAI segment includes the Company’s business of manufacturing and marketing active pharmaceutical ingredients and intermediates (API) or bulk drugs. Proprietary Products segment focuses on the research, development and manufacture of differentiated formulations and new chemical entities. These products fall within the dermatology and neurology therapeutic areas, and are marketed and sold through its subsidiary, Promius Pharma, LLC.

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