Nephros (NASDAQ:NEPH – Get Free Report) and Canopy Growth (NASDAQ:CGC – Get Free Report) are both small-cap medical companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, risk, profitability, institutional ownership, earnings, dividends and analyst recommendations.
Insider and Institutional Ownership
41.1% of Nephros shares are held by institutional investors. Comparatively, 3.3% of Canopy Growth shares are held by institutional investors. 6.7% of Nephros shares are held by company insiders. Comparatively, 0.2% of Canopy Growth shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.
Analyst Ratings
This is a breakdown of recent ratings and recommmendations for Nephros and Canopy Growth, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Nephros | 0 | 1 | 1 | 0 | 2.50 |
| Canopy Growth | 1 | 3 | 2 | 0 | 2.17 |
Profitability
This table compares Nephros and Canopy Growth’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Nephros | 4.06% | 7.66% | 5.86% |
| Canopy Growth | -75.27% | -27.34% | -17.60% |
Volatility & Risk
Nephros has a beta of 1.51, suggesting that its stock price is 51% more volatile than the S&P 500. Comparatively, Canopy Growth has a beta of 0.77, suggesting that its stock price is 23% less volatile than the S&P 500.
Earnings & Valuation
This table compares Nephros and Canopy Growth”s gross revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Nephros | $18.79 million | 1.84 | $1.19 million | $0.07 | 45.57 |
| Canopy Growth | $251.01 million | 1.54 | -$429.86 million | ($1.30) | -0.74 |
Nephros has higher earnings, but lower revenue than Canopy Growth. Canopy Growth is trading at a lower price-to-earnings ratio than Nephros, indicating that it is currently the more affordable of the two stocks.
Summary
Nephros beats Canopy Growth on 12 of the 14 factors compared between the two stocks.
About Nephros
Nephros, Inc., a commercial-stage company, develops and sells water solutions to the medical and commercial markets in the United States. It offers ultrafiltration products that are used in dialysis centers for the removal of biological contaminants from water and bicarbonate concentrate; and in hospitals for the prevention of infection from waterborne pathogens, such as legionella and pseudomonas, as well as in military and outdoor recreation, commercial, and other healthcare facilities. The company also manufactures and sells water filters that enhance the taste and odor of water, as well as reduce biofilm, cysts, particulates, and scale build-up in downstream equipment. It markets its products to food service, hospitality, convenience store, and health care markets, as well as medical institutions. The company was incorporated in 1997 and is headquartered in South Orange, New Jersey.
About Canopy Growth
Canopy Growth Corporation, together with its subsidiaries, engages in the production, distribution, and sale of cannabis and hemp-based products for recreational and medical purposes primarily in the United States, Canada, Germany, and internationally. It operates through Canada Cannabis, International Markets Cannabis, and Storz & Bickel segments. The company offers dried flower, pre-rolled joints, oils, softgel capsules, infused beverages, edibles comprising gummies, and topical formats, as well as vaporizer devices. It sells its products under the Tweed, 7ACRES, DOJA, Deep Space, HiWay, Maitri, Twd., Vert, Spectrum Therapeutics, Canopy Medical, Storz & Bickel, Martha Stewart, and Wana brands. The company was formerly known as Tweed Marijuana Inc. and changed its name to Canopy Growth Corporation in September 2015. Canopy Growth Corporation was incorporated in 2009 and is headquartered in Smiths Falls, Canada.
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