Financial Contrast: Dr. Reddy’s Laboratories (NYSE:RDY) and NewAmsterdam Pharma (NASDAQ:NAMS)

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

Analyst Ratings

This is a breakdown of current recommendations and price targets for Dr. Reddy’s Laboratories and NewAmsterdam Pharma, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dr. Reddy’s Laboratories	0	1	2	1	3.00
NewAmsterdam Pharma	0	0	7	0	3.00

Dr. Reddy’s Laboratories currently has a consensus target price of $16.95, suggesting a potential upside of 7.29%. NewAmsterdam Pharma has a consensus target price of $43.00, suggesting a potential upside of 112.77%. Given NewAmsterdam Pharma’s higher probable upside, analysts plainly believe NewAmsterdam Pharma is more favorable than Dr. Reddy’s Laboratories.

Valuation and Earnings

This table compares Dr. Reddy’s Laboratories and NewAmsterdam Pharma”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Dr. Reddy’s Laboratories	$325.54 billion	0.04	$668.00 million	$0.66	23.94
NewAmsterdam Pharma	$47.14 million	48.13	-$176.94 million	($1.88)	-10.75

Dr. Reddy’s Laboratories has higher revenue and earnings than NewAmsterdam Pharma. NewAmsterdam Pharma 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.

Insider and Institutional Ownership

3.8% of Dr. Reddy’s Laboratories shares are owned by institutional investors. Comparatively, 89.9% of NewAmsterdam Pharma shares are owned by institutional investors. 2.0% of Dr. Reddy’s Laboratories shares are owned by insiders. Comparatively, 20.8% of NewAmsterdam Pharma shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Volatility & Risk

Dr. Reddy’s Laboratories has a beta of 0.33, indicating that its stock price is 67% less volatile than the S&P 500. Comparatively, NewAmsterdam Pharma has a beta of -0.03, indicating that its stock price is 103% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Dr. Reddy’s Laboratories	17.25%	17.87%	12.32%
NewAmsterdam Pharma	N/A	N/A	N/A

Summary

Dr. Reddy’s Laboratories beats NewAmsterdam Pharma on 9 of the 14 factors compared between the two stocks.

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.

About NewAmsterdam Pharma

NewAmsterdam Pharma Company N.V., a late-stage biopharmaceutical company, develops therapies to enhance patient care in populations with metabolic disease. It is developing obicetrapib, an oral low-dose cholesteryl ester transfer protein (CETP) inhibitor, that is in various clinical trials as a monotherapy and a combination therapy with ezetimibe for lowering LDL-C for cardiovascular diseases. The company also develops Obicetrapib which is in Phase 2a clinical trial for Alzheimer’s disease. NewAmsterdam Pharma Company N.V. is headquartered in Naarden, the Netherlands.