Critical Review: Perrigo (NYSE:PRGO) and Modular Medical (NASDAQ:MODD)

Perrigo (NYSE:PRGO) and Modular Medical (NASDAQ:MODD) are both small-cap medical companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, risk, earnings, valuation, profitability, analyst recommendations and dividends.

Analyst Ratings

This is a summary of recent ratings and target prices for Perrigo and Modular Medical, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Perrigo	2	4	1	0	1.86
Modular Medical	1	0	0	0	1.00

Perrigo presently has a consensus price target of $22.50, indicating a potential upside of 71.81%. Given Perrigo’s stronger consensus rating and higher possible upside, analysts plainly believe Perrigo is more favorable than Modular Medical.

Risk and Volatility

Perrigo has a beta of 0.39, meaning that its share price is 61% less volatile than the S&P 500. Comparatively, Modular Medical has a beta of 0.16, meaning that its share price is 84% less volatile than the S&P 500.

Valuation and Earnings

This table compares Perrigo and Modular Medical”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Perrigo	$4.37 billion	0.41	-$171.80 million	($0.38)	-34.46
Modular Medical	N/A	N/A	-$18.82 million	($0.51)	-0.87

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

Institutional & Insider Ownership

95.9% of Perrigo shares are held by institutional investors. Comparatively, 27.5% of Modular Medical shares are held by institutional investors. 0.4% of Perrigo shares are held by company insiders. Comparatively, 20.5% of Modular Medical shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Profitability

This table compares Perrigo and Modular Medical’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Perrigo	-1.21%	9.16%	4.07%
Modular Medical	N/A	-202.07%	-166.97%

Summary

Perrigo beats Modular Medical on 9 of the 13 factors compared between the two stocks.

About Perrigo

Perrigo Company plc provides over-the-counter health and wellness solutions to enhance individual well-being in the United States, Europe, and internationally. It operates through Consumer Self-Care Americas and Consumer Self-Care International segments. The company develops, manufactures, markets, and distributes self-care consumer products, such as upper respiratory products, including cough suppressants, expectorants, and sinus and allergy relief; nutrition products consisting of infant formulas and nutritional beverages; digestive health products, including antacids, anti-diarrheal, and anti-heartburn; pain and sleep-aids products comprising pain relievers and fever reducers; and oral care products, which include toothbrushes, toothbrush replacement heads, floss, flossers, whitening products, and toothbrush covers. It also offers healthy lifestyle products, such as smoking cessation, well-being, and weight management products; skin care products consisting of dermatological care, scar management, lice treatment, and other products for various skin conditions; women's health products comprising feminine hygiene and contraceptives; vitamins, minerals, and supplements; rare diseases business; and other miscellaneous self-care products. The company sells its products under the Compeed, Dr. Fresh, Firefly, Good Sense, Good Start, Mederma, Nasonex, Plackers, Prevacid24HR, REACH, Rembrandt, Steripod, Opill, Solpadeine, Coldrex, Physiomer, NiQuitin, ACO, ellaOne, Compeed Stops, XLS, Arterin, Davitamon, Apiserum, Abtei, and Nicorette brands. It also offers contract manufacturing services. The company sells its products through retail drug, supermarket, and mass merchandise chains; e-commerce stores; wholesalers; pharmacies; drug and grocery retailers; and para-pharmacies. The company was formerly known as Perrigo Company and changed its name to Perrigo Company plc in December 2013. Perrigo Company plc was founded in 1887 and is headquartered in Dublin, Ireland.

About Modular Medical

Modular Medical, Inc. operates as a medical device company. It focuses on the design, development, and commercialization of insulin pumps. It offers MODD1, a two-part patch pump for type-1 and type-2 diabetes. The company is headquartered in San Diego, California.