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

Profitability

This table compares Abbott Laboratories and Cadence 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%
Cadence Pharmaceuticals N/A N/A N/A

Insider and Institutional Ownership

71.2% of Abbott Laboratories shares are held by institutional investors. 0.8% of Abbott Laboratories shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Dividends

Abbott Laboratories pays an annual dividend of $1.06 per share and has a dividend yield of 1.8%. Cadence Pharmaceuticals 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. Cadence Pharmaceuticals has increased its dividend for 44 consecutive years.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Abbott Laboratories and Cadence Pharmaceuticals, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Abbott Laboratories 0 4 10 0 2.71
Cadence Pharmaceuticals 0 0 0 0 N/A

Abbott Laboratories currently has a consensus target price of $58.50, suggesting a potential upside of 1.79%.

Earnings and Valuation

This table compares Abbott Laboratories and Cadence Pharmaceuticals’ gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Abbott Laboratories $20.85 billion 4.80 $1.40 billion $1.21 47.50
Cadence Pharmaceuticals N/A N/A N/A N/A N/A

Abbott Laboratories has higher revenue and earnings than Cadence Pharmaceuticals.

Summary

Abbott Laboratories beats Cadence Pharmaceuticals on 8 of the 10 factors compared between the two stocks.

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.

About Cadence Pharmaceuticals

Cadence Pharmaceuticals, Inc. (Cadence) is a biopharmaceutical company focused on acquiring, in-licensing, developing and commercializing products principally for use in the hospital setting. The Company has rights to one product, OFIRMEV (acetaminophen) injection, an intravenous (IV), formulation of acetaminophen. The Company in-licensed the United States, and Canadian rights to OFIRMEV from Bristol-Myers Squibb Company (BMS), which sells intravenous acetaminophen in Europe and other markets for the treatment of acute pain and fever under the brand name Perfalgan. In March 2014, Mallinckrodt Plc acquired Cadence Pharmaceuticals, Inc. In March 2014, Mallinckrodt Plc completed the acquisition of Cadence Pharmaceuticals.

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