Sonoma Pharmaceuticals (NASDAQ: SNOA) and Baxalta (NYSE:BXLT) are both medical companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, profitability, valuation, analyst recommendations, institutional ownership and risk.

Dividends

Baxalta pays an annual dividend of $0.28 per share and has a dividend yield of 0.6%. Sonoma Pharmaceuticals does not pay a dividend. Baxalta pays out 23.5% of its earnings in the form of a dividend. Sonoma Pharmaceuticals has increased its dividend for 2 consecutive years.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Sonoma Pharmaceuticals and Baxalta, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Sonoma Pharmaceuticals 0 1 1 0 2.50
Baxalta 0 0 0 0 N/A

Sonoma Pharmaceuticals currently has a consensus target price of $10.50, suggesting a potential upside of 88.85%. Given Sonoma Pharmaceuticals’ higher possible upside, equities research analysts plainly believe Sonoma Pharmaceuticals is more favorable than Baxalta.

Profitability

This table compares Sonoma Pharmaceuticals and Baxalta’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Sonoma Pharmaceuticals 47.68% -43.23% -35.78%
Baxalta 9.37% 14.28% 4.62%

Valuation & Earnings

This table compares Sonoma Pharmaceuticals and Baxalta’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Sonoma Pharmaceuticals $12.82 million 1.91 $9.27 million $1.78 3.12
Baxalta N/A N/A N/A $1.19 38.67

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

Institutional and Insider Ownership

9.2% of Sonoma Pharmaceuticals shares are owned by institutional investors. 13.3% of Sonoma Pharmaceuticals shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Summary

Sonoma Pharmaceuticals beats Baxalta on 9 of the 13 factors compared between the two stocks.

Sonoma Pharmaceuticals Company Profile

Sonoma Pharmaceuticals, Inc., formerly Oculus Innovative Sciences, Inc., is a specialty pharmaceutical company that develops and markets solutions for the treatment of dermatological conditions and advanced tissue care. The Company’s product portfolio consists of dermatology and advanced tissue care products based upon its technologies, such as Microcyn and Lipogrid. Microcyn is a small-molecule oxychlorine compound with antimicrobial and anti-inflammatory properties that, in clinical settings, reduces itch and pain associated with dermal irritations and wounds, such as sores, injuries and ulcers of dermal tissue. Lipogrid Technology contains selected lipids and a lipid precursor designed to penetrate the bilayers of the skin by blending with the natural lipid building blocks. Its products serve over five million patients across the globe by reducing infections, itch, pain, scarring and inflammatory responses. Its products are sold throughout the United States and internationally.

Baxalta Company Profile

Baxalta Incorporated (Baxalta) is a biopharmaceutical company with a portfolio of differentiated therapies that seek to address medical needs across various disease areas, including hemophilia, immunology and oncology. Baxalta’s categories of products include Hemophilia products, such as Advate, Adynovate, Recombinate, Hemofil M, Immunate, Immunine, Rixubis and Prothromplex Total; Inhibitor Therapies products, including FEIBA and OBIZUR; Immunoglobulin Therapies products, which include GAMMAGARD LIQUID/KIOVIG, HYQVIA, GAMMAGARD S/D and SUBCUVIA; BioTherapeutics products, including FLEXBUMIN, BUMINATE, ARALAST NP, GLASSIA NP and CEPROTIN, and Oncology product, such as ONCASPAR. Baxalta Company develops, manufactures and markets a portfolio of treatments for hemophilia and other bleeding disorders, immune deficiencies, alpha-1 antitrypsin deficiency, burns and shock, and other chronic and acute medical conditions, as well as oncology treatments for acute lymphoblastic leukemia.

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