Dr. Reddy’s Laboratories (NYSE:RDY) vs. Collegium Pharmaceutical (NASDAQ:COLL) Financial Analysis

Collegium Pharmaceutical (NASDAQ:COLL) and Dr. Reddy’s Laboratories (NYSE:RDY) are both healthcare companies, but which is the better business? We will compare the two businesses based on the strength of their earnings, analyst recommendations, dividends, institutional ownership, valuation, profitability and risk.

Institutional & Insider Ownership

3.8% of Dr. Reddy’s Laboratories shares are owned by institutional investors. 1.9% of Collegium Pharmaceutical shares are owned by insiders. Comparatively, 2.0% of Dr. Reddy’s Laboratories shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Collegium Pharmaceutical and Dr. Reddy’s Laboratories’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Collegium Pharmaceutical	5.93%	91.43%	15.57%
Dr. Reddy’s Laboratories	10.15%	9.49%	6.32%

Analyst Ratings

This is a summary of recent recommendations and price targets for Collegium Pharmaceutical and Dr. Reddy’s Laboratories, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Collegium Pharmaceutical	0	3	3	1	2.71
Dr. Reddy’s Laboratories	1	2	0	0	1.67

Collegium Pharmaceutical presently has a consensus price target of $52.60, indicating a potential upside of 83.97%. Given Collegium Pharmaceutical’s stronger consensus rating and higher possible upside, analysts plainly believe Collegium Pharmaceutical is more favorable than Dr. Reddy’s Laboratories.

Earnings and Valuation

This table compares Collegium Pharmaceutical and Dr. Reddy’s Laboratories”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Collegium Pharmaceutical	$780.57 million	1.19	$62.87 million	$1.24	23.06
Dr. Reddy’s Laboratories	$3.58 billion	2.90	$456.00 million	$0.44	28.31

Dr. Reddy’s Laboratories has higher revenue and earnings than Collegium Pharmaceutical. Collegium Pharmaceutical is trading at a lower price-to-earnings ratio than Dr. Reddy’s Laboratories, indicating that it is currently the more affordable of the two stocks.

Volatility & Risk

Collegium Pharmaceutical has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500. Comparatively, Dr. Reddy’s Laboratories has a beta of 0.29, indicating that its share price is 71% less volatile than the S&P 500.

Summary

Collegium Pharmaceutical beats Dr. Reddy’s Laboratories on 8 of the 15 factors compared between the two stocks.

About Collegium Pharmaceutical

Collegium Pharmaceutical, Inc., a specialty pharmaceutical company, engages in the development and commercialization of medicines for pain management. Its portfolio includes Xtampza ER, an abuse-deterrent, extended-release, and oral formulation of oxycodone for the management of pain severe enough to require daily, around-the-clock, long-term opioid treatment; Nucynta ER and Nucynta IR, which are extended-release and immediate-release formulations of tapentadol, indicated for the management of acute, severe, and persistent pain; Belbuca, a buccal film that contains buprenorphine; and Symproic, an oral formulation of naldemedine for the treatment of opioid-induced constipation in adult patients with chronic non-cancer pain. The company was formerly known as Collegium Pharmaceuticals, Inc. and changed its name to Collegium Pharmaceutical, Inc. in October 2003. Collegium Pharmaceutical, Inc. was incorporated in 2002 and is headquartered in Stoughton, Massachusetts.

About Dr. Reddy’s Laboratories

Dr. Reddy’s Laboratories Limited, together with its subsidiaries, operates as an integrated pharmaceutical company worldwide. It operates through Global Generics, Pharmaceutical Services and Active Ingredients (PSAI), and Others segments. The company’s Global Generics segment manufactures and markets prescription and over-the-counter finished pharmaceutical products that are marketed under a brand name or as a generic finished dosages with therapeutic equivalence to branded formulations, as well as engages in the biologics business. The PSAI segment manufactures and markets active pharmaceutical ingredients and intermediates, which are principal ingredients for finished pharmaceutical products. This segment also provides contract research services; and manufactures and sells active pharmaceutical ingredients and steroids in accordance with the specific customer requirements. The Others segment engages in developing therapies in the fields of oncology and inflammation; research and development of differentiated formulations; and provides digital healthcare and information technology enabled business support services. The company offers its products for various therapeutic categories primarily include gastro-intestinal, cardiovascular, anti-diabetic, dermatology, oncology, respiratory, stomatology, urology, and nephrology. Dr. Reddy’s Laboratories Limited was incorporated in 1984 and is headquartered in Hyderabad, India.