Horizon Pharma PLC (NASDAQ: HZNP) and Abbott Laboratories (NYSE:ABT) are both mid-cap pharmaceuticals – nec companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, analyst recommendations, valuation, dividends, risk, profitability and earnings.

Earnings & Valuation

This table compares Horizon Pharma PLC and Abbott Laboratories’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Horizon Pharma PLC $981.12 million 2.18 -$166.83 million ($3.04) -4.30
Abbott Laboratories $20.85 billion 4.59 $1.40 billion $1.21 45.43

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

Volatility and Risk

Horizon Pharma PLC has a beta of 1.32, suggesting that its stock price is 32% more volatile than the S&P 500. Comparatively, Abbott Laboratories has a beta of 1.55, suggesting that its stock price is 55% more volatile than the S&P 500.

Dividends

Abbott Laboratories pays an annual dividend of $1.06 per share and has a dividend yield of 1.9%. Horizon Pharma PLC does not pay a dividend. Abbott Laboratories pays out 87.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Horizon Pharma PLC has raised its dividend for 44 consecutive years.

Profitability

This table compares Horizon Pharma PLC and Abbott Laboratories’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Horizon Pharma PLC -45.28% 20.22% 5.35%
Abbott Laboratories 8.37% 13.98% 6.09%

Insider and Institutional Ownership

83.8% of Horizon Pharma PLC shares are owned by institutional investors. Comparatively, 70.6% of Abbott Laboratories shares are owned by institutional investors. 3.2% of Horizon Pharma PLC shares are owned by insiders. Comparatively, 0.8% of Abbott Laboratories shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Ratings

This is a summary of current ratings and price targets for Horizon Pharma PLC and Abbott Laboratories, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Horizon Pharma PLC 0 2 9 0 2.82
Abbott Laboratories 0 5 9 0 2.64

Horizon Pharma PLC presently has a consensus price target of $18.64, indicating a potential upside of 42.59%. Abbott Laboratories has a consensus price target of $57.64, indicating a potential upside of 4.86%. Given Horizon Pharma PLC’s stronger consensus rating and higher probable upside, equities research analysts clearly believe Horizon Pharma PLC is more favorable than Abbott Laboratories.

Summary

Abbott Laboratories beats Horizon Pharma PLC on 9 of the 16 factors compared between the two stocks.

About Horizon Pharma PLC

Horizon Pharma Public Limited Company is a biopharmaceutical company. The Company is focused on identifying, developing, acquiring and commercializing differentiated and accessible medicines that address unmet medical needs. As of December 31, 2016, the Company marketed 11 medicines through its orphan, rheumatology and primary care business units. The Company’s marketed medicines are ACTIMMUNE (interferon gamma-1b), BUPHENYL (sodium phenylbutyrate) Tablets and Powder, DUEXIS (ibuprofen/famotidine), KRYSTEXXA (pegloticase), MIGERGOT (ergotamine tartrate & caffeine suppositories), PENNSAID (diclofenac sodium topical solution) 2% weight per weight (w/w), or PENNSAID 2%, PROCYSBI (cysteamine bitartrate) delayed-release capsules, QUINSAIR (aerosolized form of levofloxacin), RAVICTI (glycerol phenylbutyrate) Oral Liquid, RAYOS (prednisone) delayed-release tablets and VIMOVO (naproxen/esomeprazole magnesium).

About Abbott Laboratories

Abbott Laboratories is engaged in the discovery, development, manufacture and sale of a range of healthcare products. The Company operates through four segments: Established Pharmaceutical Products, Diagnostic Products, Nutritional Products and Vascular Products. Its Established Pharmaceutical Products include a range of branded generic pharmaceuticals manufactured around the world and marketed and sold outside the United States. Its Diagnostic Products include a range of diagnostic systems and tests. Its Nutritional Products include a range of pediatric and adult nutritional products. Its Company’s Vascular Products include a range of coronary, endovascular, vessel closure and structural heart devices for the treatment of vascular disease. The Company, through St. Jude Medical, Inc., also offers products, such as rhythm management products, electrophysiology products, heart failure related products, vascular products, structural heart products and neuromodulation products.

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