Shire PLC (NASDAQ: SHPG) and Impax Laboratories (NASDAQ:IPXL) are both medical companies, but which is the superior business? We will compare the two companies based on the strength of their profitability, dividends, earnings, risk, analyst recommendations, valuation and institutional ownership.

Analyst Ratings

This is a summary of current recommendations and price targets for Shire PLC and Impax Laboratories, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shire PLC 0 7 13 0 2.65
Impax Laboratories 1 9 5 0 2.27

Shire PLC currently has a consensus price target of $211.00, indicating a potential upside of 42.92%. Impax Laboratories has a consensus price target of $19.67, indicating a potential upside of 8.36%. Given Shire PLC’s stronger consensus rating and higher probable upside, analysts plainly believe Shire PLC is more favorable than Impax Laboratories.

Institutional & Insider Ownership

19.3% of Shire PLC shares are owned by institutional investors. Comparatively, 88.8% of Impax Laboratories shares are owned by institutional investors. 2.0% of Shire PLC shares are owned by insiders. Comparatively, 3.2% of Impax Laboratories shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Earnings and Valuation

This table compares Shire PLC and Impax Laboratories’ revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Shire PLC N/A N/A N/A $5.34 27.65
Impax Laboratories $812.82 million 1.60 $144.42 million ($8.07) -2.25

Impax Laboratories has higher revenue and earnings than Shire PLC. Impax Laboratories is trading at a lower price-to-earnings ratio than Shire PLC, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Shire PLC and Impax Laboratories’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shire PLC 10.95% 14.41% 6.60%
Impax Laboratories -71.08% 9.05% 3.20%

Dividends

Shire PLC pays an annual dividend of $0.92 per share and has a dividend yield of 0.6%. Impax Laboratories does not pay a dividend. Shire PLC pays out 17.2% of its earnings in the form of a dividend.

Risk and Volatility

Shire PLC has a beta of 1.61, meaning that its stock price is 61% more volatile than the S&P 500. Comparatively, Impax Laboratories has a beta of 0.99, meaning that its stock price is 1% less volatile than the S&P 500.

Summary

Shire PLC beats Impax Laboratories on 9 of the 14 factors compared between the two stocks.

About Shire PLC

Shire plc is a biotech company focused on serving people with rare diseases and other specialized conditions. The Company’s segment is engaged in research, development, licensing, manufacturing, marketing, distribution and sale of specialist medicines. It focuses its development resources on projects in various therapeutic areas (TAs), including Neuroscience, Ophthalmology, Hematology, Oncology, Immunology, Gastrointestinal (GI)/Metabolic/Endocrinology Diseases. Its Hematology products include ADVATE (Antihemophilic Factor (Recombinant)), ADYNOVATE/ADYNOVI (Antihemophilic Factor (Recombinant), PEGylated)), RIXUBIS (Coagulation Factor IX (Recombinant)), VONVENDI (von Willebrand factor (Recombinant)) and FEIBA (Anti-Inhibitor Coagulant Complex). Its Genetic Diseases products include CINRYZE (C1 esterase inhibitor (human)), FIRAZYR (icatibant), ELAPRASE (idursulfase), REPLAGAL (agalsidase alfa) and VPRIV (velaglucerase alfa).

About Impax Laboratories

Impax Laboratories, Inc. is a specialty pharmaceutical company. The Company is engaged in the development, manufacture and marketing of bioequivalent pharmaceutical products (generics), in addition to the development and marketing of branded products. Its segments include Impax Generics and Impax Specialty Pharma. The Impax Generics segment is focused on the development, manufacture, sale and distribution of its generic products, which are the pharmaceutical and therapeutic equivalents of brand-name drug products and are marketed under their established drug names. The Impax Specialty Pharma segment is engaged in the promotion, sale and distribution of several branded products, including its branded pharmaceutical product, Rytary, an extended release oral capsule formulation of carbidopa-levodopa for the treatment of Parkinson’s disease, post-encephalitic Parkinsonism and Parkinsonism, and Zomig (zolmitriptan) products, indicated for the treatment of migraine headaches.

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