Financial Analysis: Dr. Reddy’s Laboratories (RDY) vs. The Competition

Dr. Reddy’s Laboratories (NYSE:RDY) is one of 894 publicly-traded companies in the “Pharmaceuticals” industry, but how does it contrast to its rivals? We will compare Dr. Reddy’s Laboratories to related businesses based on the strength of its earnings, profitability, valuation, risk, analyst recommendations, institutional ownership and dividends.

Profitability

This table compares Dr. Reddy’s Laboratories and its rivals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Dr. Reddy’s Laboratories	8.56%	7.91%	5.29%
Dr. Reddy’s Laboratories Competitors	-2,393.19%	-220.45%	-16.12%

Dividends

Dr. Reddy’s Laboratories pays an annual dividend of $0.06 per share and has a dividend yield of 0.4%. Dr. Reddy’s Laboratories pays out 16.2% of its earnings in the form of a dividend. As a group, “Pharmaceuticals” companies pay a dividend yield of 3.3% and pay out 48.0% of their earnings in the form of a dividend.

Risk & Volatility

Dr. Reddy’s Laboratories has a beta of 0.31, meaning that its stock price is 69% less volatile than the S&P 500. Comparatively, Dr. Reddy’s Laboratories’ rivals have a beta of -0.05, meaning that their average stock price is 105% less volatile than the S&P 500.

Insider and Institutional Ownership

3.8% of Dr. Reddy’s Laboratories shares are held by institutional investors. Comparatively, 32.5% of shares of all “Pharmaceuticals” companies are held by institutional investors. 2.0% of Dr. Reddy’s Laboratories shares are held by insiders. Comparatively, 14.1% of shares of all “Pharmaceuticals” companies are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Earnings and Valuation

This table compares Dr. Reddy’s Laboratories and its rivals revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Net Income	Price/Earnings Ratio
Dr. Reddy’s Laboratories	$3.58 billion	$456.00 million	39.88
Dr. Reddy’s Laboratories Competitors	$3.54 billion	$3.17 billion	553.74

Dr. Reddy’s Laboratories has higher revenue, but lower earnings than its rivals. Dr. Reddy’s Laboratories is trading at a lower price-to-earnings ratio than its rivals, indicating that it is currently more affordable than other companies in its industry.

Analyst Ratings

This is a breakdown of current ratings for Dr. Reddy’s Laboratories and its rivals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Dr. Reddy’s Laboratories	1	3	2	0	2.17
Dr. Reddy’s Laboratories Competitors	7820	13783	25791	1036	2.41

Dr. Reddy’s Laboratories presently has a consensus target price of $492.90, suggesting a potential upside of 3,240.79%. As a group, “Pharmaceuticals” companies have a potential upside of 22.96%. Given Dr. Reddy’s Laboratories’ higher possible upside, equities analysts clearly believe Dr. Reddy’s Laboratories is more favorable than its rivals.

Summary

Dr. Reddy’s Laboratories rivals beat Dr. Reddy’s Laboratories on 8 of the 15 factors compared.

About Dr. Reddy’s Laboratories

Dr. Reddy’s Laboratories is an India-based pharmaceutical company that develops, manufactures and markets generic medicines, active pharmaceutical ingredients (APIs) and other healthcare products. Its portfolio includes branded and unbranded generics, biosimilars and select proprietary medicines across therapeutic areas such as oncology, gastroenterology, cardiovascular care and diabetes. Founded in 1984 by Kallam Anji Reddy, the company is headquartered in Hyderabad, India. It serves patients and customers in India and international markets, including the United States, Europe and countries in Russia and the Commonwealth of Independent States.