Aceto (NASDAQ: ACET) and Celgene (NASDAQ:CELG) are both medical companies, but which is the superior business? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, dividends, earnings, institutional ownership and profitability.

Dividends

Aceto pays an annual dividend of $0.26 per share and has a dividend yield of 2.4%. Celgene does not pay a dividend. Aceto pays out 123.8% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Analyst Ratings

This is a breakdown of recent recommendations for Aceto and Celgene, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Aceto 0 2 1 0 2.33
Celgene 1 12 17 0 2.53

Aceto presently has a consensus target price of $15.00, indicating a potential upside of 35.75%. Celgene has a consensus target price of $130.14, indicating a potential upside of 27.94%. Given Aceto’s higher possible upside, equities analysts plainly believe Aceto is more favorable than Celgene.

Risk & Volatility

Aceto has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500. Comparatively, Celgene has a beta of 1.77, suggesting that its share price is 77% more volatile than the S&P 500.

Institutional & Insider Ownership

80.8% of Aceto shares are held by institutional investors. Comparatively, 79.9% of Celgene shares are held by institutional investors. 4.1% of Aceto shares are held by insiders. Comparatively, 1.0% of Celgene shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Aceto and Celgene’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Aceto 1.07% 10.18% 3.95%
Celgene 27.36% 63.80% 17.45%

Valuation & Earnings

This table compares Aceto and Celgene’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Aceto $638.32 million 0.52 $11.37 million $0.21 52.62
Celgene $11.23 billion 7.13 $2.00 billion $4.24 23.99

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

Summary

Celgene beats Aceto on 11 of the 16 factors compared between the two stocks.

Aceto Company Profile

Aceto Corporation (Aceto) is engaged in the marketing, sales and distribution of finished dosage form generic pharmaceuticals, nutraceutical products, pharmaceutical active ingredients and intermediates, specialty performance chemicals inclusive of agricultural intermediates and agricultural protection products. The Company’s business is organized along product lines into three segments: Human Health, Pharmaceutical Ingredients and Performance Chemicals. As of June 30, 2016, it distributed over 1,100 chemical compounds used primarily as finished products or raw materials in the agricultural, coatings and industrial chemical industries. The Human Health segment includes finished dosage form generic drugs and nutraceutical products. As of June 30, 2016, the Pharmaceutical Ingredients segment had two product groups: Active Pharmaceutical Ingredients and Pharmaceutical Intermediates. The Performance Chemicals segment includes specialty chemicals and agricultural protection products.

Celgene Company Profile

Celgene Corporation is an integrated global biopharmaceutical company. The Company, together with its subsidiaries, is engaged in the discovery, development and commercialization of therapies for the treatment of cancer and inflammatory diseases through solutions in protein homeostasis, immuno-oncology, epigenetics, immunology and neuro-inflammation. Its commercial-stage products include REVLIMID (lenalidomide), POMALYST/IMNOVID (pomalidomide), OTEZLA (apremilast), ABRAXANE (paclitaxel albumin-bound particles for injectable suspension), VIDAZA, azacitidine for injection (generic version of VIDAZA) and THALOMID (thalidomide). Its clinical trial activity includes trials across the disease areas of hematology, solid tumors, and inflammation and immunology. The Company also markets ISTODAX, which is an epigenetic modifier. The Company is also evaluating AG-221 (enasidenib) in combination with VIDAZA in newly diagnosed acute myeloid leukemia with isocitrate dehydrogenase-2 mutations.

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