Lexicon Pharmaceuticals (NASDAQ:LXRX) versus Bristol-Myers Squibb (NYSE:BMY) Critical Analysis

Bristol-Myers Squibb (NYSE:BMY) and Lexicon Pharmaceuticals (NASDAQ:LXRX) are both medical companies, but which is the better stock? We will compare the two companies based on the strength of their profitability, valuation, analyst recommendations, earnings, institutional ownership, risk and dividends.

Institutional and Insider Ownership

76.4% of Bristol-Myers Squibb shares are held by institutional investors. Comparatively, 74.7% of Lexicon Pharmaceuticals shares are held by institutional investors. 0.1% of Bristol-Myers Squibb shares are held by insiders. Comparatively, 6.8% of Lexicon Pharmaceuticals 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.

Profitability

This table compares Bristol-Myers Squibb and Lexicon Pharmaceuticals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bristol-Myers Squibb	-18.53%	13.93%	2.46%
Lexicon Pharmaceuticals	-4,109.41%	-107.38%	-64.09%

Risk and Volatility

Bristol-Myers Squibb has a beta of 0.43, meaning that its share price is 57% less volatile than the S&P 500. Comparatively, Lexicon Pharmaceuticals has a beta of 1.04, meaning that its share price is 4% more volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and target prices for Bristol-Myers Squibb and Lexicon Pharmaceuticals, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bristol-Myers Squibb	2	11	4	2	2.32
Lexicon Pharmaceuticals	0	3	2	0	2.40

Bristol-Myers Squibb currently has a consensus price target of $57.86, indicating a potential downside of 4.20%. Lexicon Pharmaceuticals has a consensus price target of $3.67, indicating a potential upside of 963.11%. Given Lexicon Pharmaceuticals’ stronger consensus rating and higher probable upside, analysts plainly believe Lexicon Pharmaceuticals is more favorable than Bristol-Myers Squibb.

Valuation and Earnings

This table compares Bristol-Myers Squibb and Lexicon Pharmaceuticals”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bristol-Myers Squibb	$48.30 billion	2.54	-$8.95 billion	($4.42)	-13.66
Lexicon Pharmaceuticals	$31.08 million	2.73	-$177.12 million	($0.64)	-0.54

Lexicon Pharmaceuticals has lower revenue, but higher earnings than Bristol-Myers Squibb. Bristol-Myers Squibb is trading at a lower price-to-earnings ratio than Lexicon Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.

Summary

Lexicon Pharmaceuticals beats Bristol-Myers Squibb on 8 of the 15 factors compared between the two stocks.

About Bristol-Myers Squibb

Bristol-Myers Squibb Company discovers, develops, licenses, manufactures, markets, distributes, and sells biopharmaceutical products worldwide. It offers products for hematology, oncology, cardiovascular, immunology, fibrotic, and neuroscience diseases. The company's products include Eliquis for reduction in risk of stroke/systemic embolism in non-valvular atrial fibrillation, and for the treatment of DVT/PE; Opdivo for various anti-cancer indications, including bladder, blood, CRC, head and neck, RCC, HCC, lung, melanoma, MPM, stomach and esophageal cancer; Pomalyst/Imnovid for multiple myeloma; Orencia for active rheumatoid arthritis and psoriatic arthritis; and Sprycel for the treatment of Philadelphia chromosome-positive chronic myeloid leukemia. It also provides Yervoy for the treatment of patients with unresectable or metastatic melanoma; Empliciti for the treatment of multiple myeloma; Abecma for the treatment of relapsed or refractory multiple myeloma; Reblozyl for the treatment of anemia; Opdualag for the treatment of unresectable or metastatic melanoma; and Zeposia to treat relapsing forms of multiple sclerosis. In addition, the company offers Breyanzi for the treatment of relapsed or refractory large B-cell lymphoma; Onureg for the treatment of AML; Inrebic for the treatment of myelofibrosis; Camzyos for the treatment of symptomatic obstructive HCM to enhance functional capacity and symptom; Sotyktu for the treatment of moderate-to-severe plaque psoriasis; Augtyro for the treatment of locally advanced or metastatic ROS1-positive NSCLC; Revlimid, an oral immunomodulatory drug for the treatment of multiple myeloma; and Abraxane to treat breast cancer, NSCLC and pancreatic cancer. It sells products to wholesalers, distributors, pharmacies, retailers, hospitals, clinics, and government agencies. The company was formerly known as Bristol-Myers Company. Bristol-Myers Squibb Company was founded in 1887 and is headquartered in Princeton, New Jersey.

About Lexicon Pharmaceuticals

Lexicon Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the discovery, development, and commercialization of pharmaceutical products. Its orally-delivered small molecule drug candidates under development comprise Sotagliflozin that completed Phase III clinical trials for the for the treatment of heart failure and type 1 diabetes; and LX9211, which is in Phase II clinical development for the treatment of neuropathic pain and LX2761, which is in Phase I clinical development for gastrointestinal tract. Lexicon Pharmaceuticals, Inc. has strategic collaboration and license agreements with Bristol-Myers Squibb Company and Genentech, Inc. The company was incorporated in 1995 and is headquartered in The Woodlands, Texas.