Dr.Reddy's Laboratories (RDY) & Innoviva (INVA) Critical Review

Dr.Reddy's Laboratories (NYSE: RDY) and Innoviva (NASDAQ:INVA) are both medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their institutional ownership, risk, valuation, analyst recommendations, dividends, earnings and profitability.

Earnings and Valuation

This table compares Dr.Reddy's Laboratories and Innoviva’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Dr.Reddy's Laboratories $2.17 billion 2.57 $186.00 million $0.93 36.15
Innoviva $217.22 million 7.61 $134.14 million $1.11 14.63

Dr.Reddy's Laboratories has higher revenue and earnings than Innoviva. Innoviva is trading at a lower price-to-earnings ratio than Dr.Reddy's Laboratories, indicating that it is currently the more affordable of the two stocks.


Dr.Reddy's Laboratories pays an annual dividend of $0.29 per share and has a dividend yield of 0.9%. Innoviva does not pay a dividend. Dr.Reddy's Laboratories pays out 31.2% of its earnings in the form of a dividend.


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

Net Margins Return on Equity Return on Assets
Dr.Reddy's Laboratories 6.95% 8.79% 4.89%
Innoviva 61.76% -48.93% 35.25%

Insider & Institutional Ownership

13.1% of Dr.Reddy's Laboratories shares are owned by institutional investors. Comparatively, 70.2% of Innoviva shares are owned by institutional investors. 2.0% of Dr.Reddy's Laboratories shares are owned by insiders. Comparatively, 1.6% of Innoviva shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.

Analyst Ratings

This is a summary of current ratings and recommmendations for Dr.Reddy's Laboratories and Innoviva, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Dr.Reddy's Laboratories 1 1 2 0 2.25
Innoviva 1 3 1 0 2.00

Dr.Reddy's Laboratories currently has a consensus price target of $30.51, indicating a potential downside of 9.25%. Innoviva has a consensus price target of $13.40, indicating a potential downside of 17.49%. Given Dr.Reddy's Laboratories’ stronger consensus rating and higher possible upside, research analysts plainly believe Dr.Reddy's Laboratories is more favorable than Innoviva.

Risk and Volatility

Dr.Reddy's Laboratories has a beta of 0.24, indicating that its share price is 76% less volatile than the S&P 500. Comparatively, Innoviva has a beta of 2.34, indicating that its share price is 134% more volatile than the S&P 500.


Dr.Reddy's Laboratories beats Innoviva on 9 of the 16 factors compared between the two stocks.

About Dr.Reddy's Laboratories

Dr. Reddy’s Laboratories Limited is a pharmaceutical company that is engaged in providing medicines. The Company operates in three segments: Global Generics, Pharmaceutical Services and Active Ingredients (PSAI), and Proprietary Products. The Global Generics segment includes manufacturing and marketing prescription and over-the-counter finished pharmaceutical products ready for consumption by the patient, marketed under a brand name (branded formulations) or as generic finished dosages with therapeutic equivalence to branded formulations (generics). PSAI segment includes the Company’s business of manufacturing and marketing active pharmaceutical ingredients and intermediates (API) or bulk drugs. Proprietary Products segment focuses on the research, development and manufacture of differentiated formulations and new chemical entities. These products fall within the dermatology and neurology therapeutic areas, and are marketed and sold through its subsidiary, Promius Pharma, LLC.

About Innoviva

Innoviva, Inc., formerly Theravance, Inc., is engaged in the development, commercialization and financial management of bio-pharmaceuticals. It focuses on the respiratory assets partnered with Glaxo Group Limited (GSK), including RELVAR/BREO ELLIPTA (fluticasone furoate (FF)/vilanterol (VI)) and ANORO ELLIPTA (umeclidinium bromide/vilanterol (UMEC/VI)). Under the Long-Acting Beta2 Agonist (LABA) Collaboration Agreement and the Strategic Alliance Agreement with GSK, the Company is eligible to receive the annual royalties from GSK on sales of RELVAR/BREO ELLIPTA. For other products combined with a LABA from the LABA collaboration, such as ANORO ELLIPTA, royalties are upward tiering and range from 6.5% to 10%. RELVAR/BREO is a once-a-day combination inhaled respiratory medicine consisting of a LABA (VI) and an inhaled corticosteroid (ICS), FF. ANORO ELLIPTA a once-daily medicine combining a long-acting muscarinic antagonist (LAMA), umeclidinium bromide (UMEC), with a LABA.

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