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

Dividends

Amgen pays an annual dividend of $4.60 per share and has a dividend yield of 2.6%. Forest Laboratories does not pay a dividend. Amgen pays out 41.6% of its earnings in the form of a dividend. Forest Laboratories has increased its dividend for 6 consecutive years.

Profitability

This table compares Amgen and Forest Laboratories’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Amgen 35.54% 29.90% 11.80%
Forest Laboratories N/A N/A N/A

Analyst Recommendations

This is a summary of recent recommendations and price targets for Amgen and Forest Laboratories, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Amgen 0 11 8 1 2.50
Forest Laboratories 0 0 0 0 N/A

Amgen presently has a consensus target price of $190.89, suggesting a potential upside of 8.82%.

Earnings and Valuation

This table compares Amgen and Forest Laboratories’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Amgen $22.99 billion 5.54 $7.72 billion $11.05 15.87
Forest Laboratories N/A N/A N/A N/A N/A

Amgen has higher revenue and earnings than Forest Laboratories.

Institutional and Insider Ownership

78.4% of Amgen shares are held by institutional investors. 0.2% of Amgen shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Amgen beats Forest Laboratories on 9 of the 11 factors compared between the two stocks.

About Amgen

Amgen Inc. is a biotechnology company. The Company discovers, develops, manufactures and delivers various human therapeutics. It operates in human therapeutics segment. Its marketed products portfolio includes Neulasta (pegfilgrastim); erythropoiesis-stimulating agents (ESAs), such as Aranesp (darbepoetin alfa) and EPOGEN (epoetin alfa); Sensipar/Mimpara (cinacalcet); XGEVA (denosumab); Prolia (denosumab); NEUPOGEN (filgrastim), and other marketed products, such as KYPROLIS (carfilzomib), Vectibix (panitumumab), Nplate (romiplostim), Repatha (evolocumab), BLINCYTO (blinatumomab), IMLYGIC (talimogene laherparepvec) and Corlanor (ivabradine). It focuses on human therapeutics for the treatment of serious illness in the areas of oncology/hematology, cardiovascular disease and neuroscience. Its product candidates in Phase III include Erenumab for episodic migraine, Aranesp for myelodysplastic syndromes, BLINCYTO for acute lymphoblastic leukemia and IMLYGIC for metastatic melanoma.

About Forest Laboratories

Forest Laboratories, Inc. (Forest), develops, manufactures and sells branded forms of ethical drug products, which requires a physician’s prescription. The Company‚Äôs products include Namenda, a N-methyl-D-aspartate (NMDA) antagonist for the treatment of moderate to severe dementia of the Alzheimer’s type; Bystolic, a beta-blocker for the treatment of hypertension; Linzess, a guanylate cyclase type-C receptor agonist for the once-daily treatment for men and women suffering from IBS-C or CIC; Tudorza, a long-acting antimuscarinic agent for the long-term maintenance treatment of bronchospasm associated with chronic obstructive pulmonary disease (COPD), including chronic bronchitis and emphysema, and Viibryd, a SSRI and a 5-HT1A receptor partial agonist for the treatment of adults with depressive disorder (MDD). In February 2014, it acquired Aptalis. Effective July 2, 2014 Forest Laboratories Inc, a unit of Actavis PLC, acquired the entire share capital of Furiex Pharmaceuticals Inc.

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