Canopy Growth (NASDAQ:CGC) & Nephros (NASDAQ:NEPH) Financial Review

Canopy Growth (NASDAQ:CGC) and Nephros (NASDAQ:NEPH) are both small-cap medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their risk, earnings, institutional ownership, profitability, dividends, analyst recommendations and valuation.

Valuation and Earnings

This table compares Canopy Growth and Nephros”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Canopy Growth	$225.65 million	1.83	-$429.86 million	($1.30)	-0.78
Nephros	$18.79 million	1.88	$1.19 million	$0.07	46.43

Nephros has lower revenue, but higher earnings 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.

Risk & Volatility

Canopy Growth has a beta of 0.77, indicating that its share price is 23% less volatile than the S&P 500. Comparatively, Nephros has a beta of 1.51, indicating that its share price is 51% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings and target prices for Canopy Growth and Nephros, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Canopy Growth	1	3	2	0	2.17
Nephros	0	1	1	0	2.50

Nephros has a consensus target price of $6.00, suggesting a potential upside of 84.62%. Given Nephros’ stronger consensus rating and higher possible upside, analysts clearly believe Nephros is more favorable than Canopy Growth.

Profitability

This table compares Canopy Growth and Nephros’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Canopy Growth	-94.39%	-46.85%	-28.95%
Nephros	4.06%	7.66%	5.86%

Institutional and Insider Ownership

3.3% of Canopy Growth shares are held by institutional investors. Comparatively, 41.1% of Nephros shares are held by institutional investors. 0.2% of Canopy Growth shares are held by insiders. Comparatively, 6.7% of Nephros shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Summary

Nephros beats Canopy Growth on 12 of the 14 factors compared between the two stocks.

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.

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.