Financial Review: Amphastar Pharmaceuticals (NASDAQ:AMPH) vs. Dr. Reddy’s Laboratories (NYSE:RDY)

Amphastar Pharmaceuticals (NASDAQ:AMPH) and Dr. Reddy’s Laboratories (NYSE:RDY) are both medical companies, but which is the better investment? We will compare the two businesses based on the strength of their analyst recommendations, risk, dividends, profitability, earnings, institutional ownership and valuation.

Earnings and Valuation

This table compares Amphastar Pharmaceuticals and Dr. Reddy’s Laboratories”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Amphastar Pharmaceuticals	$731.97 million	1.79	$159.52 million	$2.26	12.61
Dr. Reddy’s Laboratories	$3.81 billion	3.09	$663.00 million	$0.77	18.32

Dr. Reddy’s Laboratories has higher revenue and earnings than Amphastar Pharmaceuticals. Amphastar Pharmaceuticals is trading at a lower price-to-earnings ratio than Dr. Reddy’s Laboratories, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Amphastar Pharmaceuticals and Dr. Reddy’s Laboratories’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Amphastar Pharmaceuticals	15.43%	19.70%	9.17%
Dr. Reddy’s Laboratories	16.41%	15.89%	10.73%

Analyst Recommendations

This is a summary of recent ratings for Amphastar Pharmaceuticals and Dr. Reddy’s Laboratories, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Amphastar Pharmaceuticals	0	6	2	0	2.25
Dr. Reddy’s Laboratories	0	2	1	0	2.33

Amphastar Pharmaceuticals currently has a consensus target price of $31.00, suggesting a potential upside of 8.77%. Dr. Reddy’s Laboratories has a consensus target price of $16.90, suggesting a potential upside of 19.80%. Given Dr. Reddy’s Laboratories’ stronger consensus rating and higher probable upside, analysts clearly believe Dr. Reddy’s Laboratories is more favorable than Amphastar Pharmaceuticals.

Volatility & Risk

Amphastar Pharmaceuticals has a beta of 0.88, suggesting that its share price is 12% less volatile than the S&P 500. Comparatively, Dr. Reddy’s Laboratories has a beta of 0.35, suggesting that its share price is 65% less volatile than the S&P 500.

Institutional and Insider Ownership

65.1% of Amphastar Pharmaceuticals shares are owned by institutional investors. Comparatively, 3.9% of Dr. Reddy’s Laboratories shares are owned by institutional investors. 27.1% of Amphastar Pharmaceuticals shares are owned by insiders. Comparatively, 2.0% of Dr. Reddy’s Laboratories shares are owned 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.

Summary

Dr. Reddy’s Laboratories beats Amphastar Pharmaceuticals on 8 of the 14 factors compared between the two stocks.

About Amphastar Pharmaceuticals

Amphastar Pharmaceuticals, Inc., a bio-pharmaceutical company, develops, manufactures, markets, and sells generic and proprietary injectable, inhalation, and intranasal products in the United States, China, and France. It offers BAQSIMI, a nasal spray for the treatment of severe hypoglycemia; Primatene Mist, an over-the-counter epinephrine inhalation product for the temporary relief of mild symptoms of intermittent asthma; Enoxaparin, to prevent and treat deep vein thrombosis; REXTOVY and Naloxone for opioid overdose; Glucagon for injection emergency kit; and Cortrosyn, for use as a diagnostic agent in the screening of patients with adrenocortical insufficiency. The company provides Amphadase, an injection to absorb and disperse other injected drugs; Epinephrine injection for allergic reactions; Lidocaine jelly, an anesthetic product for urological procedures; Lidocaine topical solution for various procedures; Phytonadione injection, a vitamin K1 injection for newborn babies; emergency syringe products; morphine injection for use with patient-controlled analgesia pumps; and Lorazepam injection for surgery and medical procedures. In addition, it offers Neostigmine methylsulfate injection to treat myasthenia gravis and to reverse the effects of muscle relaxants; Isoproterenol hydrochloride injection for mild or transient episodes of heart block; Ganirelix Acetate injection for the inhibition of premature luteinizing hormone surges; Vasopressin to increase blood pressure; and Regadenoson, a stress agent for radionuclide myocardial perfusion imaging. Further, the company distributes recombinant human insulin APIs and porcine insulin API. Additionally, it develops generic product candidates, such as injectable, inhalation, and analytical technologies; biosimial product candidates; and intranasal epinephrine for the treatment of allergic reactions. The company was founded in 1996 and is headquartered in Rancho Cucamonga, California.

About Dr. Reddy’s Laboratories

Dr. Reddy’s Laboratories Limited, together with its subsidiaries, operates as an integrated pharmaceutical company worldwide. It operates through Global Generics, Pharmaceutical Services and Active Ingredients (PSAI), and Others segments. The company’s Global Generics segment manufactures and markets prescription and over-the-counter finished pharmaceutical products that are marketed under a brand name or as a generic finished dosages with therapeutic equivalence to branded formulations, as well as engages in the biologics business. The PSAI segment manufactures and markets active pharmaceutical ingredients and intermediates, which are principal ingredients for finished pharmaceutical products. This segment also provides contract research services; and manufactures and sells active pharmaceutical ingredients and steroids in accordance with the specific customer requirements. The Others segment engages in developing therapies in the fields of oncology and inflammation; research and development of differentiated formulations; and provides digital healthcare and information technology enabled business support services. The company offers its products for various therapeutic categories primarily include gastro-intestinal, cardiovascular, anti-diabetic, dermatology, oncology, respiratory, stomatology, urology, and nephrology. Dr. Reddy’s Laboratories Limited was incorporated in 1984 and is headquartered in Hyderabad, India.