Abbott Laboratories (NYSE: ABT) and Tetraphase Pharmaceuticals (NASDAQ:TTPH) are both healthcare companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, valuation, risk, dividends and analyst recommendations.
This is a breakdown of recent ratings and recommmendations for Abbott Laboratories and Tetraphase Pharmaceuticals, as provided by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Abbott Laboratories presently has a consensus target price of $61.27, indicating a potential upside of 4.12%. Tetraphase Pharmaceuticals has a consensus target price of $17.00, indicating a potential upside of 161.14%. Given Tetraphase Pharmaceuticals’ higher possible upside, analysts plainly believe Tetraphase Pharmaceuticals is more favorable than Abbott Laboratories.
Abbott Laboratories pays an annual dividend of $1.06 per share and has a dividend yield of 1.8%. Tetraphase Pharmaceuticals does not pay a dividend. Abbott Laboratories pays out 87.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Tetraphase Pharmaceuticals has raised its dividend for 45 consecutive years.
Valuation & Earnings
This table compares Abbott Laboratories and Tetraphase Pharmaceuticals’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Abbott Laboratories||$20.85 billion||4.91||$1.40 billion||$1.21||48.63|
|Tetraphase Pharmaceuticals||$5.14 million||65.13||-$77.48 million||($2.87)||-2.27|
Abbott Laboratories has higher revenue and earnings than Tetraphase Pharmaceuticals. Tetraphase Pharmaceuticals is trading at a lower price-to-earnings ratio than Abbott Laboratories, indicating that it is currently the more affordable of the two stocks.
Risk & Volatility
Abbott Laboratories has a beta of 1.55, indicating that its stock price is 55% more volatile than the S&P 500. Comparatively, Tetraphase Pharmaceuticals has a beta of 2.51, indicating that its stock price is 151% more volatile than the S&P 500.
Institutional & Insider Ownership
71.2% of Abbott Laboratories shares are owned by institutional investors. Comparatively, 58.2% of Tetraphase Pharmaceuticals shares are owned by institutional investors. 0.8% of Abbott Laboratories shares are owned by company insiders. Comparatively, 5.5% of Tetraphase Pharmaceuticals shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.
This table compares Abbott Laboratories and Tetraphase Pharmaceuticals’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Abbott Laboratories beats Tetraphase Pharmaceuticals on 11 of the 17 factors compared between the two stocks.
Abbott Laboratories Company Profile
Abbott Laboratories is engaged in the discovery, development, manufacture and sale of a range of healthcare products. The Company operates through four segments: Established Pharmaceutical Products, Diagnostic Products, Nutritional Products and Vascular Products. Its Established Pharmaceutical Products include a range of branded generic pharmaceuticals manufactured around the world and marketed and sold outside the United States. Its Diagnostic Products include a range of diagnostic systems and tests. Its Nutritional Products include a range of pediatric and adult nutritional products. Its Company’s Vascular Products include a range of coronary, endovascular, vessel closure and structural heart devices for the treatment of vascular disease. The Company, through St. Jude Medical, Inc., also offers products, such as rhythm management products, electrophysiology products, heart failure related products, vascular products, structural heart products and neuromodulation products.
Tetraphase Pharmaceuticals Company Profile
Tetraphase Pharmaceuticals, Inc. is a clinical-stage biopharmaceutical company. The Company uses its chemistry technology to create antibiotics for multidrug-resistant infections. The Company is developing its lead product candidate, eravacycline, a fully synthetic tetracycline derivative, as a spectrum intravenous (IV) and oral antibiotic for use as a first-line empiric monotherapy for the treatment of multidrug-resistant infections, including multidrug-resistant gram-negative infections. The Company also develops TP-6076 for multidrug-resistant gram-negative infections. Eravacycline is a fluorocycline antibiotic. The Company is conducting a global Phase III clinical program for eravacycline called Investigating Gram-Negative Infections Treated with Eravacycline (IGNITE). TP-271 is a fully synthetic fluorocycline being developed for respiratory disease caused by bacterial biothreat pathogens in healthy volunteers.
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