Depomed (DEPO) and Hospira (NYSE:HSP) Financial Analysis

Hospira (NYSE: HSP) and Depomed (NASDAQ:DEPO) are both healthcare companies, but which is the better business? We will contrast the two companies based on the strength of their valuation, profitability, risk, analyst recommendations, dividends, earnings and institutional ownership.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Hospira and Depomed, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Hospira 0 0 0 0 N/A
Depomed 1 5 3 0 2.22

Depomed has a consensus target price of $13.22, indicating a potential upside of 109.21%. Given Depomed’s higher possible upside, analysts clearly believe Depomed is more favorable than Hospira.

Insider & Institutional Ownership

91.4% of Depomed shares are owned by institutional investors. 2.6% of Depomed shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Profitability

This table compares Hospira and Depomed’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Hospira 12.15% 16.51% 8.65%
Depomed -26.02% -45.03% -9.34%

Earnings and Valuation

This table compares Hospira and Depomed’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Hospira N/A N/A N/A N/A N/A
Depomed $425.34 million 0.93 $112.64 million ($1.79) -3.53

Depomed has higher revenue and earnings than Hospira.

Summary

Depomed beats Hospira on 5 of the 8 factors compared between the two stocks.

About Hospira

Hospira, Inc. provides injectable pharmaceutical drugs and infusion technologies and it develops, manufactures, distributes and markets biosimilars. The Company’s portfolio includes generic acute-care and oncology injectables, biosimilars, and integrated infusion therapy and medication management products. The Company conducts operations across the world and is managed in three segments: the Americas, which include the United States, Canada, and Latin America; Europe, Middle East, and Africa (EMEA), and the Asia Pacific, which includes Asia, Japan, Australia and New Zealand. Its portfolio of products includes Specialty Injectable Pharmaceuticals, which includes generic injectables, injectables and biosimilars, Medication Management and Other Pharmaceuticals. Its portfolio of products is used by hospitals and alternate site providers, such as clinics, home healthcare providers and long-term care facilities.

About Depomed

Depomed, Inc. is a specialty pharmaceutical company. The Company focuses on pain and other central nervous system (CNS) conditions. Its products include NUCYNTA ER (tapentadol extended release tablets), NUCYNTA IR (NUCYNTA) (tapentadol), Gralise (gabapentin), CAMBIA (diclofenac potassium for oral solution), Zipsor (diclofenac potassium) and Lazanda (fentanyl). Its NUCYNTA ER (tapentadol extended release tablets) is a product for the management of pain severe enough to require daily long term opioid treatment, including neuropathic pain associated with diabetic peripheral neuropathy in adults, and its NUCYNTA (tapentadol) is a product for the management of moderate to severe acute pain in adults. Its Gralise (gabapentin) is a once-daily product for the management of postherpetic neuralgia. Its CAMBIA (diclofenac potassium for oral solution) is a product for the acute treatment of migraine attacks.

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