Contrasting Biostage (OTCMKTS:BSTG) & Arch Therapeutics (OTCMKTS:ARTH)

Biostage (OTCMKTS:BSTG) and Arch Therapeutics (OTCMKTS:ARTH) are both small-cap medical companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, profitability, institutional ownership, valuation, dividends, analyst recommendations and risk.

Institutional and Insider Ownership

6.9% of Arch Therapeutics shares are owned by institutional investors. 15.3% of Biostage shares are owned by insiders. Comparatively, 4.5% of Arch Therapeutics shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of recent ratings for Biostage and Arch Therapeutics, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Biostage	0	0	1	0	3.00
Arch Therapeutics	0	0	0	0	0.00

Given Arch Therapeutics’ higher probable upside, analysts plainly believe Arch Therapeutics is more favorable than Biostage.

Profitability

This table compares Biostage and Arch Therapeutics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Biostage	N/A	N/A	-174.43%
Arch Therapeutics	-8,257.70%	N/A	-730.22%

Risk & Volatility

Biostage has a beta of -1.02, suggesting that its share price is 202% less volatile than the S&P 500. Comparatively, Arch Therapeutics has a beta of 4.02, suggesting that its share price is 302% more volatile than the S&P 500.

Valuation and Earnings

This table compares Biostage and Arch Therapeutics”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Biostage	N/A	N/A	-$6.07 million	($0.58)	-7.67
Arch Therapeutics	$80,000.00	0.00	-$6.98 million	($2.34)	N/A

Biostage has higher earnings, but lower revenue than Arch Therapeutics. Biostage is trading at a lower price-to-earnings ratio than Arch Therapeutics, indicating that it is currently the more affordable of the two stocks.

Summary

Biostage beats Arch Therapeutics on 7 of the 11 factors compared between the two stocks.

About Biostage

Biostage, Inc., a biotechnology company, offers products to cure patients of cancers, injuries, and birth defects of the gastro-intestinal tract and the airways. The company's pipeline includes organ-regeneration technology for the repair or replacement of diseased or damaged organs, as well as product candidates to treat cancer, injury, and birth defects of the bronchus. Its lead product candidate is Biostage Esophageal Implant for the treatment of severe esophageal disease. The company was formerly known as Harvard Apparatus Regenerative Technology, Inc. and changed its name to Biostage, Inc. in March 2016. Biostage, Inc. was founded in 2009 and is headquartered in Holliston, Massachusetts.

About Arch Therapeutics

Arch Therapeutics, Inc., together with its subsidiaries, operates as a biotechnology company in the United States. It develops and markets products based on its AC5 self-assembling technology platform to stop bleeding and control leaking, as well as manages wounds during surgery, trauma, and interventional care or from disease. The company's flagship products include AC5 advanced wound system and AC5 topical hemostat, which are intended for skin applications, such as management of complicated chronic wounds or acute surgical wounds. It is also involved in the development of AC5-G for gastrointestinal endoscopic procedures, and AC5-V and AC5 surgical hemostat for hemostasis inside the body. The company was founded in 2006 and is based in Framingham, Massachusetts.