Shire (NASDAQ: SHPG) and Amphastar Pharmaceuticals (NASDAQ:AMPH) are both medical companies, but which is the superior investment? We will contrast the two companies based on the strength of their valuation, profitability, earnings, risk, analyst recommendations, institutional ownership and dividends.

Institutional and Insider Ownership

20.3% of Shire shares are held by institutional investors. Comparatively, 44.1% of Amphastar Pharmaceuticals shares are held by institutional investors. 2.0% of Shire shares are held by insiders. Comparatively, 11.1% of Amphastar Pharmaceuticals shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Dividends

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

Profitability

This table compares Shire and Amphastar Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shire 10.95% 14.41% 6.60%
Amphastar Pharmaceuticals 0.12% 2.30% 1.74%

Earnings & Valuation

This table compares Shire and Amphastar Pharmaceuticals’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Shire $11.40 billion 3.83 $327.40 million $5.34 27.22
Amphastar Pharmaceuticals $255.16 million 3.40 $10.53 million N/A N/A

Shire has higher revenue and earnings than Amphastar Pharmaceuticals.

Analyst Recommendations

This is a breakdown of current ratings and price targets for Shire and Amphastar Pharmaceuticals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shire 0 5 9 0 2.64
Amphastar Pharmaceuticals 0 2 4 0 2.67

Shire currently has a consensus price target of $212.18, indicating a potential upside of 45.99%. Amphastar Pharmaceuticals has a consensus price target of $20.83, indicating a potential upside of 10.29%. Given Shire’s higher possible upside, equities research analysts plainly believe Shire is more favorable than Amphastar Pharmaceuticals.

Volatility and Risk

Shire has a beta of 1.59, meaning that its stock price is 59% more volatile than the S&P 500. Comparatively, Amphastar Pharmaceuticals has a beta of 1.69, meaning that its stock price is 69% more volatile than the S&P 500.

Summary

Shire beats Amphastar Pharmaceuticals on 9 of the 15 factors compared between the two stocks.

About Shire

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 Amphastar Pharmaceuticals

Amphastar Pharmaceuticals, Inc. is a specialty pharmaceutical company. The Company focuses primarily on developing, manufacturing, marketing and selling generic and injectable, inhalation and intranasal products. The Company has two segments: finished pharmaceutical products and active pharmaceutical ingredients (API) products. The finished pharmaceutical products segment manufactures, markets and distributes enoxaparin, Cortrosyn, Amphadase, naloxone, lidocaine jelly, as well as various other critical and non-critical care drugs. The API segment manufactures and distributes recombinant human insulin and porcine insulin. The Company also manufactures and sells insulin API. As of December 31, 2016, the Company manufactured and sold 19 products. As of December 31, 2016, the Company developed a portfolio of 15 generic abbreviated new drug applications (ANDAs) three generic biosimilar product candidates and six injectable and inhalation product candidates.

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