Cumberland Pharmaceuticals (NASDAQ: CPIX) and Merus Labs International (NASDAQ:MSLI) are both small-cap medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their institutional ownership, earnings, dividends, profitabiliy, risk, valuation and analyst recommendations.

Analyst Ratings

This is a breakdown of current recommendations for Cumberland Pharmaceuticals and Merus Labs International, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Cumberland Pharmaceuticals 0 0 0 0 N/A
Merus Labs International 0 6 0 0 2.00

Merus Labs International has a consensus target price of $1.35, suggesting a potential upside of 3.85%. Given Merus Labs International’s higher possible upside, analysts plainly believe Merus Labs International is more favorable than Cumberland Pharmaceuticals.

Profitability

This table compares Cumberland Pharmaceuticals and Merus Labs International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Cumberland Pharmaceuticals -5.63% 1.93% 1.56%
Merus Labs International -12.08% -6.58% -3.47%

Valuation & Earnings

This table compares Cumberland Pharmaceuticals and Merus Labs International’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Cumberland Pharmaceuticals $34.92 million 3.22 $885,950.00 ($0.12) -58.50
Merus Labs International $80.09 million 1.90 $31.89 million ($0.08) -16.25

Merus Labs International has higher revenue and earnings than Cumberland Pharmaceuticals. Cumberland Pharmaceuticals is trading at a lower price-to-earnings ratio than Merus Labs International, indicating that it is currently the more affordable of the two stocks.

Insider and Institutional Ownership

34.5% of Cumberland Pharmaceuticals shares are owned by institutional investors. Comparatively, 19.7% of Merus Labs International shares are owned by institutional investors. 38.0% of Cumberland 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.

Risk & Volatility

Cumberland Pharmaceuticals has a beta of 0.98, suggesting that its share price is 2% less volatile than the S&P 500. Comparatively, Merus Labs International has a beta of 1.55, suggesting that its share price is 55% more volatile than the S&P 500.

Summary

Cumberland Pharmaceuticals beats Merus Labs International on 6 of the 11 factors compared between the two stocks.

Cumberland Pharmaceuticals Company Profile

Cumberland Pharmaceuticals Inc. (Cumberland) is a specialty pharmaceutical company. The Company is focused on the acquisition, development and commercialization of branded prescription products. The Company operates through specialty pharmaceutical products segment. The Company’s product portfolio includes Acetadote (acetylcysteine) Injection for the treatment of acetaminophen poisoning; Caldolor (ibuprofen) Injection for the treatment of pain and fever; Kristalose (lactulose) for Oral Solution for the treatment of chronic and acute constipation; Omeclamox-Pak, (omeprazole, clarithromycin, amoxicillin) for the treatment of Helicobacter pylori (H. pylori) infection and related duodenal ulcer disease; Vaprisol (conivaptan) Injection to raise serum sodium levels in hospitalized patients with euvolemic and hypervolemic hyponatremia; Hepatoren (ifetroban) Injection, and Boxaban (ifetroban) oral capsules for the treatment of patients with aspirin-exacerbated respiratory disease (AERD).

Merus Labs International Company Profile

Merus Labs International Inc. is a specialty pharmaceutical company. The Company is engaged in the acquisition and licensing of branded prescription pharmaceutical products. The Company’s products include Elantan, Isoket, Deponit, Sintrom, Emselex/Enablex, Surgestone, Provames, Speciafoldine, Tredemine, Salagen, Estraderm MX and Vancocin. Elantan are tablets or capsules that belong to a group of medicines called organic nitrates. Isoket belongs to a group of medicines called organic nitrates. Deponit belongs to a group of medicines called nitrates. Sintrom is an anticoagulant indicated to treat and prevent thromboembolic diseases. Emselex/Enablex is used in adults to treat overactive bladder syndrome. Surgestone is used to treat women with menstrual irregularities due to ovulation disorder, dysmenorrhea and premenstrual syndrome. Provames is used as hormone replacement therapy in postmenopausal women with symptoms of estrogen deficiency.

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