Madrigal Pharmaceuticals (NASDAQ: MDGL) and Dimension Therapeutics (NASDAQ:DMTX) are both small-cap medical companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, dividends, institutional ownership, valuation, earnings, risk and analyst recommendations.

Risk & Volatility

Madrigal Pharmaceuticals has a beta of 0.48, suggesting that its stock price is 52% less volatile than the S&P 500. Comparatively, Dimension Therapeutics has a beta of 2.3, suggesting that its stock price is 130% more volatile than the S&P 500.

Valuation and Earnings

This table compares Madrigal Pharmaceuticals and Dimension Therapeutics’ gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Madrigal Pharmaceuticals N/A N/A N/A ($3.20) -5.54
Dimension Therapeutics $14.88 million 6.40 -$50.87 million ($2.14) -1.78

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

Profitability

This table compares Madrigal Pharmaceuticals and Dimension Therapeutics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Madrigal Pharmaceuticals N/A -85.00% -75.65%
Dimension Therapeutics -358.21% -98.72% -61.95%

Institutional & Insider Ownership

16.4% of Madrigal Pharmaceuticals shares are owned by institutional investors. Comparatively, 70.8% of Dimension Therapeutics shares are owned by institutional investors. 66.4% of Madrigal Pharmaceuticals shares are owned by company insiders. Comparatively, 2.2% of Dimension Therapeutics shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of recent ratings and recommmendations for Madrigal Pharmaceuticals and Dimension Therapeutics, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Madrigal Pharmaceuticals 0 0 1 0 3.00
Dimension Therapeutics 0 4 1 0 2.20

Madrigal Pharmaceuticals currently has a consensus target price of $40.00, indicating a potential upside of 125.73%. Dimension Therapeutics has a consensus target price of $3.73, indicating a potential downside of 1.91%. Given Madrigal Pharmaceuticals’ stronger consensus rating and higher probable upside, analysts plainly believe Madrigal Pharmaceuticals is more favorable than Dimension Therapeutics.

Madrigal Pharmaceuticals Company Profile

Madrigal Pharmaceuticals, Inc., formerly Synta Pharmaceuticals Corp., is a clinical-stage biopharmaceutical company. The Company focuses on the development and commercialization of therapeutic candidates for the treatment of cardiovascular-metabolic diseases and nonalcoholic steatohepatitis (NASH). The Company’s lead product, MGL-3196, is a Phase II-ready once-daily, oral, liver-directed selective thyroid hormone receptor-b (THR-b) agonist for the treatment of NASH, and heterozygous and homozygous familial hypercholesterolemia (FH). Its product pipeline also includes MGL-3745, which is used in the treatment of NASH and FH. MGL-3196 has completed Phase I single and multiple dose trials in healthy volunteers. MGL-3196 is being developed for dyslipidemia/hypercholesterolemia to lower low-density lipoproteins cholesterol, triglyceride levels and lipoprotein(a). MGL-3196 also reduces triglycerides in the plasma and liver by increasing fat metabolism and shows an anti-diabetic action.

Dimension Therapeutics Company Profile

Dimension Therapeutics, Inc. is a gene therapy company. The Company is focused on discovering and developing therapeutic products for people living with rare diseases associated with the liver and caused by genetic mutations. It has programs for hemophilia B, hemophilia A, ornithine transcarbamylase (OTC) deficiency, and glycogen storage disease type Ia (GSDIa). The Company’s gene therapy product candidates and programs are designed to provide a functional copy of an abnormal or missing gene using the advanced adeno-associated virus (AAV)-based vector delivery technology. DTX101 is the Company’s lead gene therapy product candidate designed to deliver Factor IX (FIX), gene expression in patients with hemophilia B. DTX201 is its Factor VIII (FVIII) gene therapy program for the treatment of hemophilia A. DTX301 is its gene therapy product candidate designed for the treatment of patients with OTC deficiency. DTX401 is its gene therapy program for the treatment of patients with GSDIa.

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