Abbott Laboratories (NYSE: ABT) and Aegerion Pharmaceuticals (NASDAQ:AEGR) are both medical companies, but which is the better stock? We will compare the two companies based on the strength of their valuation, analyst recommendations, institutional ownership, dividends, profitability, earnings and risk.

Profitability

This table compares Abbott Laboratories and Aegerion Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Abbott Laboratories 8.37% 13.98% 6.09%
Aegerion Pharmaceuticals -75.07% N/A -29.21%

Analyst Recommendations

This is a summary of current ratings and recommmendations for Abbott Laboratories and Aegerion Pharmaceuticals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Abbott Laboratories 0 5 9 0 2.64
Aegerion Pharmaceuticals 0 1 0 0 2.00

Abbott Laboratories currently has a consensus target price of $57.64, suggesting a potential upside of 2.66%. Aegerion Pharmaceuticals has a consensus target price of $1.50, suggesting a potential downside of 23.86%. Given Abbott Laboratories’ stronger consensus rating and higher possible upside, equities analysts clearly believe Abbott Laboratories is more favorable than Aegerion Pharmaceuticals.

Dividends

Abbott Laboratories pays an annual dividend of $1.06 per share and has a dividend yield of 1.9%. Aegerion Pharmaceuticals does not pay a dividend. Abbott Laboratories pays out 83.5% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Aegerion Pharmaceuticals has increased its dividend for 44 consecutive years.

Insider and Institutional Ownership

71.1% of Abbott Laboratories shares are owned by institutional investors. Comparatively, 84.9% of Aegerion Pharmaceuticals shares are owned by institutional investors. 0.8% of Abbott Laboratories shares are owned by company insiders. Comparatively, 4.6% of Aegerion Pharmaceuticals shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Volatility and Risk

Abbott Laboratories has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500. Comparatively, Aegerion Pharmaceuticals has a beta of 0.5, indicating that its share price is 50% less volatile than the S&P 500.

Valuation & Earnings

This table compares Abbott Laboratories and Aegerion Pharmaceuticals’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Abbott Laboratories $20.85 billion 4.66 $1.40 billion $1.27 43.98
Aegerion Pharmaceuticals N/A N/A N/A ($5.97) -0.33

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

Summary

Abbott Laboratories beats Aegerion Pharmaceuticals on 10 of the 14 factors compared between the two stocks.

Abbott Laboratories Company Profile

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.

Aegerion Pharmaceuticals Company Profile

Aegerion Pharmaceuticals, Inc. is a biopharmaceutical company engaged in the development and commercialization of therapies for patients with debilitating rare diseases. It operates through pharmaceuticals segment. Its products include lomitapide and metreleptin. Lomitapide is a small molecule microsomal triglyceride transfer protein (MTP) inhibitor. Lomitapide received marketing approval under the brand name Juxtapid (lomitapide) capsules from the United States Food and Drug Administration (FDA) as an adjunct to a low-fat diet and other lipid-lowering treatments. It also received marketing authorization for lomitapide in the European Union (EU) under the brand name LOJUXTA (lomitapide) hard capsules (LOJUXTA) as a treatment for HoFH in adults. Metreleptin is a recombinant human leptin analog that exerts its function by binding to and activating the human leptin receptor. Metreleptin is marketed in the United States under the brand name MYALEPT (metreleptin) for injection (MYALEPT).

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