Neos Therapeutics (NASDAQ: NEOS) and Aceto Corporation (NASDAQ:ACET) are both small-cap medical companies, but which is the better business? We will compare the two businesses based on the strength of their risk, profitability, earnings, dividends, institutional ownership, analyst recommendations and valuation.
Aceto Corporation pays an annual dividend of $0.26 per share and has a dividend yield of 2.5%. Neos Therapeutics does not pay a dividend. Aceto Corporation pays out 74.3% of its earnings in the form of a dividend.
This table compares Neos Therapeutics and Aceto Corporation’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
This is a breakdown of recent ratings for Neos Therapeutics and Aceto Corporation, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Neos Therapeutics currently has a consensus price target of $16.75, suggesting a potential upside of 82.07%. Aceto Corporation has a consensus price target of $18.00, suggesting a potential upside of 72.41%. Given Neos Therapeutics’ stronger consensus rating and higher possible upside, research analysts plainly believe Neos Therapeutics is more favorable than Aceto Corporation.
Volatility & Risk
Neos Therapeutics has a beta of -0.9, suggesting that its stock price is 190% less volatile than the S&P 500. Comparatively, Aceto Corporation has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500.
Institutional and Insider Ownership
44.3% of Neos Therapeutics shares are held by institutional investors. Comparatively, 82.3% of Aceto Corporation shares are held by institutional investors. 5.2% of Neos Therapeutics shares are held by company insiders. Comparatively, 4.1% of Aceto Corporation shares are held by company 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.
Valuation and Earnings
This table compares Neos Therapeutics and Aceto Corporation’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Neos Therapeutics||$15.62 million||16.54||-$69.70 million||($4.45)||-2.07|
|Aceto Corporation||$638.32 million||0.49||$68.18 million||$0.35||29.83|
Aceto Corporation has higher revenue and earnings than Neos Therapeutics. Neos Therapeutics is trading at a lower price-to-earnings ratio than Aceto Corporation, indicating that it is currently the more affordable of the two stocks.
Aceto Corporation beats Neos Therapeutics on 9 of the 15 factors compared between the two stocks.
Neos Therapeutics Company Profile
Neos Therapeutics, Inc. is a pharmaceutical company. The Company is focused on developing, manufacturing and commercializing products utilizing its modified-release drug delivery technology platform. Its segment is engaged in the development, manufacturing and commercialization of pharmaceuticals. It has utilized its platform to develop its product for the treatment of attention deficit hyperactivity disorder (ADHD). Its product candidates are extended-release (XR), medications in patient-friendly, orally disintegrating tablets (ODT) or liquid suspension dosage forms. Its branded product and product candidates incorporate over two of the prescribed medications for the treatment of ADHD, methylphenidate and amphetamine. Its modified-release drug delivery platform has enabled it to create extended-release ODT and liquid suspension dosage forms of the medications. It focuses on developing Adzenys XR-ODT, Cotempla XR-ODT and NT-0201.
Aceto Corporation 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.
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