Critical Analysis: XenoPort (XNPT) versus Sanofi (SNY)

XenoPort (NASDAQ: XNPT) and Sanofi (NYSE:SNY) are both healthcare companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, risk, analyst recommendations, earnings, valuation, profitability and institutional ownership.

Dividends

Sanofi pays an annual dividend of $1.10 per share and has a dividend yield of 2.5%. XenoPort does not pay a dividend. Sanofi pays out 28.1% of its earnings in the form of a dividend.

Profitability

This table compares XenoPort and Sanofi’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
XenoPort -103.12% -414.36% -37.19%
Sanofi 25.44% 25.19% 14.09%

Valuation & Earnings

This table compares XenoPort and Sanofi’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
XenoPort N/A N/A N/A ($1.21) N/A
Sanofi $37.43 billion 2.96 $4.86 billion $3.92 11.21

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

Institutional and Insider Ownership

9.1% of Sanofi shares are held by institutional investors. 1.0% of Sanofi shares are held by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Analyst Ratings

This is a breakdown of current ratings and price targets for XenoPort and Sanofi, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
XenoPort 0 0 0 0 N/A
Sanofi 2 6 2 0 2.00

Sanofi has a consensus target price of $51.50, indicating a potential upside of 17.23%.

Summary

Sanofi beats XenoPort on 10 of the 11 factors compared between the two stocks.

XenoPort Company Profile

XenoPort, Inc. is a biopharmaceutical company. The Company is focused on commercializing HORIZANT (gabapentin enacarbil) Extended-Release Tablets in the United States. The Company’s segment is the development and commercialization of product candidates for the treatment of neurological and other disorders. Its development-stage product candidates include XP23829, XP21279 and arbaclofen placarbil. HORIZANT has been approved by the United States Food and Drug Administration for the treatment of moderate-to-severe primary restless legs syndrome in adults and for the management of postherpetic neuralgia in adults. XP23829 is a fumaric acid ester compound and a prodrug of metabolite monomethyl fumarate being developed for the treatment for patients with moderate-to-severe chronic plaque-type psoriasis and/or patients with relapsing forms of multiple sclerosis. XP21279 is a Transported Prodrug of levodopa being developed for the treatment for patients with idiopathic Parkinson’s disease.

Sanofi Company Profile

Sanofi is a healthcare company, focused on patient needs and engaged in the research, development, manufacture and marketing of therapeutic solutions. The Company’s segments are Pharmaceuticals, Human Vaccines (Vaccines), and Other. The Pharmaceuticals segment comprises the commercial operations of various franchises, including Speciality Care (Rare Diseases, Multiple Sclerosis, and Oncology), Diabetes and Cardiovascular, Established Prescription Products, Consumer Healthcare and Generics, and research and development, production and marketing activities for all of the Company’s pharmaceuticals operations. The Vaccines segment is dedicated to vaccines and includes the commercial operations of the Company’s vaccines division Sanofi Pasteur and dedicated research and development, production and marketing activities for the Company’s vaccines operations. Its Rare Diseases products include Cerezyme, Cerdelga, Myozyme and Lumizyme, Fabrazyme, and Aldurazyme.

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