Akorn (NASDAQ: AKRX) and Opko Health (NASDAQ:OPK) are both mid-cap medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their profitability, dividends, institutional ownership, risk, valuation, analyst recommendations and earnings.

Risk and Volatility

Akorn has a beta of 1.38, suggesting that its share price is 38% more volatile than the S&P 500. Comparatively, Opko Health has a beta of 1.85, suggesting that its share price is 85% more volatile than the S&P 500.

Institutional and Insider Ownership

69.5% of Akorn shares are owned by institutional investors. Comparatively, 22.5% of Opko Health shares are owned by institutional investors. 28.2% of Akorn shares are owned by company insiders. Comparatively, 40.2% of Opko Health 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.

Profitability

This table compares Akorn and Opko Health’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Akorn 12.15% 21.31% 9.06%
Opko Health -6.52% -3.67% -2.78%

Analyst Recommendations

This is a summary of recent recommendations and price targets for Akorn and Opko Health, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Akorn 2 8 1 0 1.91
Opko Health 0 3 6 0 2.67

Akorn presently has a consensus price target of $29.13, indicating a potential downside of 12.14%. Opko Health has a consensus price target of $15.25, indicating a potential upside of 135.34%. Given Opko Health’s stronger consensus rating and higher possible upside, analysts plainly believe Opko Health is more favorable than Akorn.

Valuation & Earnings

This table compares Akorn and Opko Health’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Akorn $1.02 billion 4.06 $372.04 million $1.48 22.40
Opko Health $1.18 billion 3.07 -$17.02 million ($0.17) -38.12

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

Summary

Akorn beats Opko Health on 7 of the 13 factors compared between the two stocks.

Akorn Company Profile

Akorn Inc. (Akorn), together with its subsidiaries, is a specialty generic pharmaceutical company that develops, manufactures and markets generic and branded prescription pharmaceuticals, as well as private-label over-the-counter (OTC) consumer health products and animal health pharmaceuticals. The Company operates through two segments: Prescription Pharmaceuticals and the Consumer Health. The Prescription Pharmaceuticals segment consists of generic and branded prescription pharmaceuticals in a range of dosage forms, including sterile ophthalmics, injectables and inhalants and non-sterile oral liquids, topicals and nasal sprays and otics. The Consumer Health segment consists of branded and private-label OTC products and animal health products dispensed by veterinary professionals. Its branded and private-label OTC products are focused on ophthalmics, including a dry eye treatment TheraTears Therapy for Your Eyes.

Opko Health Company Profile

OPKO Health, Inc. is a healthcare company. Its segments include Pharmaceutical, Diagnostics and Corporate. Pharmaceutical consists of the pharmaceutical operations in Chile, Mexico, Ireland, Israel and Spain and its pharmaceutical research and development operations. Diagnostics consists of the clinical laboratory operations in Bio-Reference Laboratories (Bio-Reference) and its point-of-care operations. Through Bio-Reference, it operates laboratory divisions, such as Bio-Reference, GenPath (Oncology), GenPath (Women’s Health), GeneDx and Laboratorio Bueno Salud. As of December 31, 2016, it had one commercial stage pharmaceutical product and several pharmaceutical compounds and technologies in various stages of research and development for a range of indications and conditions, including Renal Products, Biologics, hGH-CTP, Factor VII, Oxyntomodulin, active pharmaceutical ingredients, Oligonucleotide Therapeutics, NK-1 Program, Asthma and chronic obstructive pulmonary disease.

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