Axsome Therapeutics (NYSE: AGN) and Allergan (NYSE:AGN) are both medical companies, but which is the superior investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, dividends, analyst recommendations, profitability, earnings and valuation.

Risk and Volatility

Axsome Therapeutics has a beta of -0.15, meaning that its share price is 115% less volatile than the S&P 500. Comparatively, Allergan has a beta of 1.21, meaning that its share price is 21% more volatile than the S&P 500.

Insider and Institutional Ownership

15.6% of Axsome Therapeutics shares are held by institutional investors. Comparatively, 77.4% of Allergan shares are held by institutional investors. 34.3% of Axsome Therapeutics shares are held by company insiders. Comparatively, 0.4% of Allergan shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Axsome Therapeutics and Allergan’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Axsome Therapeutics N/A N/A -$28.94 million ($1.24) -2.66
Allergan $15.94 billion 3.92 -$4.13 billion $16.35 11.27

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

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Axsome Therapeutics and Allergan, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Axsome Therapeutics 0 0 3 0 3.00
Allergan 0 5 17 0 2.77

Axsome Therapeutics currently has a consensus target price of $13.00, suggesting a potential upside of 293.94%. Allergan has a consensus target price of $213.95, suggesting a potential upside of 16.10%. Given Axsome Therapeutics’ stronger consensus rating and higher possible upside, analysts plainly believe Axsome Therapeutics is more favorable than Allergan.

Profitability

This table compares Axsome Therapeutics and Allergan’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Axsome Therapeutics N/A -198.09% -89.32%
Allergan -10.29% 8.60% 5.23%

Dividends

Allergan pays an annual dividend of $2.88 per share and has a dividend yield of 1.6%. Axsome Therapeutics does not pay a dividend. Allergan pays out 17.6% of its earnings in the form of a dividend.

Summary

Allergan beats Axsome Therapeutics on 9 of the 15 factors compared between the two stocks.

About Axsome Therapeutics

Axsome Therapeutics, Inc., a clinical stage biopharmaceutical company, is developing novel therapies for central nervous system (CNS) disorders. Its product candidate portfolio includes AXS-05, AXS-09, AXS-02, AXS-07, and AXS-06. AXS-05 is in the Phase III clinical trial in treatment resistant depression and in agitation associated with Alzheimer's disease, as well as in the Phase II clinical trial for smoking cessation. AXS-02 is also in the Phase III clinical trial in knee osteoarthritis associated with bone marrow lesions pursuant to a special protocol assessment and in chronic low back pain associated with Modic changes. AXS-07 is in Phase I clinical trial for the acute treatment of migraine. AXS-06 is also in Phase I clinical trial for the treatment of osteoarthritis and rheumatoid arthritis and for the reduction of the risk of nonsteroidal anti-inflammatory drug associated gastric ulcers. AXS-09 is a novel, oral medicine combination of esbupropion and dextromethorphan, which is in Phase I clinical trial. The company has a research collaboration agreement with Duke University for evaluating AXS-05 in a Phase II trial in smoking cessation. It has operations in the United States and Australia. The company was founded in 2012 and is based in New York, New York.

About Allergan

Allergan plc, a pharmaceutical company, develops, manufactures, and commercializes branded pharmaceutical, device, biologic, surgical, and regenerative medicine products worldwide. It operates through US Specialized Therapeutics, US General Medicine, and International segments. The company offers a portfolio of products for the central nervous system, eye care, medical aesthetics and dermatology, gastroenterology, women's health, urology, and anti-infective therapeutic categories. It also provides breast implants and tissue expanders; RM-131 (relamorelin), a peptide ghrelin agonist for the treatment of diabetic gastroparesis; ocular implants; and Kybella, a non-surgical treatment for submental fullness. In addition, the company develops therapies for non-alcoholic steatohepatitis and other liver diseases; treatments for neurodegenerative disorders, including Alzheimer's disease; small molecule therapeutics that target inflammatory and fibrotic diseases; and delivery system and botulinum toxin-based prescription products. It has collaboration, option, and license agreement with Lyndra, Inc.; strategic alliance and option agreement with Editas Medicine, Inc.; and licensing agreements with Assembly Biosciences, Inc. MedImmune, and Heptares Therapeutics, Ltd. The company was formerly known as Actavis plc and changed its name to Allergan plc in June 2015. Allergan plc was founded in 1983 and is headquartered in Dublin, Ireland.

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