Critical Survey: Fate Therapeutics (NASDAQ:FATE) & Grifols (NASDAQ:GRFS)

Grifols (NASDAQ:GRFS) and Fate Therapeutics (NASDAQ:FATE) are both healthcare companies, but which is the superior business? We will contrast the two businesses based on the strength of their institutional ownership, profitability, earnings, risk, dividends, valuation and analyst recommendations.

Institutional and Insider Ownership

97.5% of Fate Therapeutics shares are held by institutional investors. 0.2% of Grifols shares are held by company insiders. Comparatively, 4.7% of Fate Therapeutics shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Volatility and Risk

Grifols has a beta of 0.75, suggesting that its stock price is 25% less volatile than the S&P 500. Comparatively, Fate Therapeutics has a beta of 2.65, suggesting that its stock price is 165% more volatile than the S&P 500.

Profitability

This table compares Grifols and Fate Therapeutics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Grifols	5.54%	6.21%	2.39%
Fate Therapeutics	-1,941.09%	-65.08%	-41.73%

Valuation & Earnings

This table compares Grifols and Fate Therapeutics”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Grifols	$8.51 billion	0.70	$454.82 million	$0.19	46.11
Fate Therapeutics	$6.65 million	31.89	-$136.32 million	($1.03)	-1.72

Grifols has higher revenue and earnings than Fate Therapeutics. Fate Therapeutics is trading at a lower price-to-earnings ratio than Grifols, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a breakdown of current recommendations and price targets for Grifols and Fate Therapeutics, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Grifols	1	2	0	0	1.67
Fate Therapeutics	1	1	4	0	2.50

Grifols currently has a consensus price target of $9.00, indicating a potential upside of 2.74%. Fate Therapeutics has a consensus price target of $5.80, indicating a potential upside of 227.68%. Given Fate Therapeutics’ stronger consensus rating and higher possible upside, analysts clearly believe Fate Therapeutics is more favorable than Grifols.

About Grifols

Grifols is a global healthcare company headquartered in Barcelona, Spain, focused on developing and producing plasma-derived medicines and other healthcare products. Founded in 1909, the company has expanded from its origins in laboratory services into a business spanning plasma collection, biopharmaceuticals, diagnostics and hospital solutions. Its biopharmaceutical business collects and processes human plasma to make medicines, including immunoglobulins, albumin and coagulation factors. Grifols also supplies diagnostic products and services for transfusion medicine and offers products used in hospitals and clinical laboratories.

About Fate Therapeutics

Fate Therapeutics, Inc. is a clinical-stage biopharmaceutical company focused on developing cellular immunotherapies for cancer and autoimmune diseases. The company uses induced pluripotent stem cell (iPSC) technology to create standardized, potentially off-the-shelf immune cell products, including natural killer (NK) cells and T cells. Its research and development activities include iPSC-derived cell therapies engineered to recognize and attack cancer cells. Fate’s pipeline has included candidates such as FT819, an iPSC-derived, CD19-targeted CAR T-cell therapy, along with other investigational NK-cell and T-cell programs.