Reviewing Lannett (LCI) and Opko Health (OPK)

Lannett (NYSE: LCI) and Opko Health (NASDAQ:OPK) are both medical companies, but which is the better investment? We will contrast the two companies based on the strength of their risk, analyst recommendations, dividends, valuation, profitability, earnings and institutional ownership.

Valuation and Earnings

This table compares Lannett and Opko Health’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Lannett $633.34 million 1.72 -$580,000.00 $1.12 25.89
Opko Health $1.22 billion 2.28 -$25.08 million ($0.22) -22.68

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

Profitability

This table compares Lannett and Opko Health’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Lannett 6.67% 18.23% 6.16%
Opko Health -9.45% -5.17% -3.94%

Volatility and Risk

Lannett has a beta of 2.85, meaning that its stock price is 185% more volatile than the S&P 500. Comparatively, Opko Health has a beta of 1.81, meaning that its stock price is 81% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings for Lannett and Opko Health, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Lannett 0 3 2 0 2.40
Opko Health 0 2 6 0 2.75

Lannett presently has a consensus price target of $21.50, indicating a potential downside of 25.86%. Opko Health has a consensus price target of $14.81, indicating a potential upside of 196.84%. Given Opko Health’s stronger consensus rating and higher possible upside, analysts plainly believe Opko Health is more favorable than Lannett.

Institutional & Insider Ownership

97.3% of Lannett shares are held by institutional investors. Comparatively, 22.9% of Opko Health shares are held by institutional investors. 15.0% of Lannett shares are held by insiders. Comparatively, 40.2% of Opko Health shares are held by 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

Lannett beats Opko Health on 7 of the 13 factors compared between the two stocks.

Lannett Company Profile

Lannett Company, Inc. develops, manufactures, markets and distributes generic versions of brand pharmaceutical products. The Company manufactures and/or distributes prescription products with the exception of a small portfolio of over-the-counter products manufactured by its subsidiary, Silarx Pharmaceuticals, Inc. As of June 30, 2016, the Company’s products included Acetazolamide Tablets; Butalbital, Acetaminophen and Caffeine Tablets; Butalbital, Aspirin and Caffeine Capsules; C-Topical Solution; Digoxin Tablets; Glycolax Rx; Isosorbide Mononitrate CR; Levothyroxine Sodium Tablets; Methylphenidate HCL CD; Methylphenidate ER; Nifedipine CR; Omeprazole DR; Oxbutynin ER; Pantoprazole DR; Pilocarpine HCl Tablets; Triamterene w/Hydrochlorothiazide Capsules, and Ursodiol Capsules. The Company has additional products under development, which are orally administered solid oral-dosage products (tablet/capsule) or oral solutions, nasal, topicals or parentarels, as well as other dosage forms.

Opko Health Company Profile

OPKO Health, Inc. is a healthcare company. Its segments include Pharmaceutical, Diagnostics and Corporate. Pharmaceutical consists of the pharmaceutical operations in Chile, Mexico, Ireland, Israel and Spain and its pharmaceutical research and development operations. Diagnostics consists of the clinical laboratory operations in Bio-Reference Laboratories (Bio-Reference) and its point-of-care operations. Through Bio-Reference, it operates laboratory divisions, such as Bio-Reference, GenPath (Oncology), GenPath (Women’s Health), GeneDx and Laboratorio Bueno Salud. As of December 31, 2016, it had one commercial stage pharmaceutical product and several pharmaceutical compounds and technologies in various stages of research and development for a range of indications and conditions, including Renal Products, Biologics, hGH-CTP, Factor VII, Oxyntomodulin, active pharmaceutical ingredients, Oligonucleotide Therapeutics, NK-1 Program, Asthma and chronic obstructive pulmonary disease.

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