Head-To-Head Contrast: Ardelyx (NASDAQ:ARDX) & Royalty Pharma (NASDAQ:RPRX)

Royalty Pharma (NASDAQ:RPRX) and Ardelyx (NASDAQ:ARDX) are both healthcare companies, but which is the superior business? We will contrast the two companies based on the strength of their risk, dividends, profitability, analyst recommendations, valuation, institutional ownership and earnings.

Profitability

This table compares Royalty Pharma and Ardelyx’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Royalty Pharma	32.14%	30.01%	14.91%
Ardelyx	-12.35%	-36.00%	-10.77%

Insider & Institutional Ownership

54.3% of Royalty Pharma shares are held by institutional investors. Comparatively, 58.9% of Ardelyx shares are held by institutional investors. 18.8% of Royalty Pharma shares are held by company insiders. Comparatively, 5.3% of Ardelyx 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.

Risk and Volatility

Royalty Pharma has a beta of 0.44, meaning that its stock price is 56% less volatile than the S&P 500. Comparatively, Ardelyx has a beta of 0.7, meaning that its stock price is 30% less volatile than the S&P 500.

Valuation & Earnings

This table compares Royalty Pharma and Ardelyx”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Royalty Pharma	$2.38 billion	14.65	$770.95 million	$1.45	41.79
Ardelyx	$407.32 million	2.32	-$61.60 million	($0.22)	-17.27

Royalty Pharma has higher revenue and earnings than Ardelyx. Ardelyx is trading at a lower price-to-earnings ratio than Royalty Pharma, 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 Royalty Pharma and Ardelyx, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Royalty Pharma	0	0	8	0	3.00
Ardelyx	2	0	9	1	2.75

Royalty Pharma presently has a consensus target price of $61.29, indicating a potential upside of 1.15%. Ardelyx has a consensus target price of $13.90, indicating a potential upside of 265.79%. Given Ardelyx’s higher possible upside, analysts plainly believe Ardelyx is more favorable than Royalty Pharma.

Summary

Royalty Pharma beats Ardelyx on 10 of the 15 factors compared between the two stocks.

About Royalty Pharma

Royalty Pharma plc operates as a buyer of biopharmaceutical royalties and a funder of innovations in the biopharmaceutical industry in the United States. It is also involved in the identification, evaluation, and acquisition of royalties on various biopharmaceutical therapies. In addition, the company collaborates with innovators from academic institutions, research hospitals and not-for-profits, small and mid-cap biotechnology companies, and pharmaceutical companies. Its portfolio consists of royalties on approximately 35 commercial products and 14 development-stage product candidates that address various therapeutic areas, such as rare disease, cancer, neuroscience, immunology, respiratory, infectious disease, hematology, and diabetes. The company was founded in 1996 and is based in New York, New York.

About Ardelyx

Ardelyx, Inc., a biopharmaceutical company, discovers, develops, and commercializes medicines to treat gastrointestinal and cardiorenal therapeutic areas in the United States and internationally. The company’s lead product candidate is tenapanor for the treatment of patients with irritable bowel syndrome with constipation. It also develops XPHOZAH, which is in Phase III clinical trial to reduce serum phosphorus in adults with chronic kidney disease (CKD)on dialysis, or hyperphosphatemia; RDX013, a potassium secretagogue, for the treatment of elevated serum potassium, or hyperkalemia, a problem among patients with kidney and/or heart failure; and RDX020, for adult patients with metabolic acidosis, a serious electrolyte disorder. The company has agreements with Kyowa Kirin, Fosun Pharmaceutical Industrial Development Co. Ltd., and Knight Therapeutics, Inc. for the development and commercialization of tenapanor in their respective territories. The company was formerly known as Nteryx, Inc. and changed its name to Ardelyx, Inc. in June 2008. Ardelyx, Inc. was incorporated in 2007 and is headquartered in Waltham, Massachusetts.