Critical Analysis: Schrödinger (NASDAQ:SDGR) and Guardion Health Sciences (NASDAQ:GHSI)

Schrödinger (NASDAQ:SDGR) and Guardion Health Sciences (NASDAQ:GHSI) are both small-cap medical companies, but which is the superior investment? We will contrast the two companies based on the strength of their profitability, earnings, dividends, analyst recommendations, risk, valuation and institutional ownership.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Schrödinger and Guardion Health Sciences, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Schrödinger	0	3	7	1	2.82
Guardion Health Sciences	0	1	0	0	2.00

Schrödinger currently has a consensus price target of $38.90, suggesting a potential upside of 73.66%. Given Schrödinger’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Schrödinger is more favorable than Guardion Health Sciences.

Profitability

This table compares Schrödinger and Guardion Health Sciences’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Schrödinger	-75.94%	-29.25%	-20.60%
Guardion Health Sciences	-16.69%	-77.29%	-42.08%

Risk & Volatility

Schrödinger has a beta of 1.51, suggesting that its share price is 51% more volatile than the S&P 500. Comparatively, Guardion Health Sciences has a beta of 0.91, suggesting that its share price is 9% less volatile than the S&P 500.

Insider and Institutional Ownership

79.1% of Schrödinger shares are held by institutional investors. Comparatively, 20.2% of Guardion Health Sciences shares are held by institutional investors. 8.6% of Schrödinger shares are held by insiders. Comparatively, 1.3% of Guardion Health Sciences shares are held by 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.

Earnings and Valuation

This table compares Schrödinger and Guardion Health Sciences’ gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Schrödinger	$216.67 million	7.51	$40.72 million	($1.88)	-11.91
Guardion Health Sciences	$12.25 million	1.03	$160,000.00	($4.02)	-2.46

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

Summary

Schrödinger beats Guardion Health Sciences on 13 of the 15 factors compared between the two stocks.

About Schrödinger

Schrödinger, Inc., together with its subsidiaries, develops physics-based computational platform that enables discovery of novel molecules for drug development and materials applications. The company operates in two segments, Software and Drug Discovery. The Software segment is focused on licensing its software to transform molecular discovery for life sciences and materials science industries. The Drug Discovery segment focuses on building a portfolio of preclinical and clinical programs, internally and through collaborations. The company serves biopharmaceutical and industrial companies, academic institutions, and government laboratories worldwide. Schrödinger, Inc. was incorporated in 1990 and is based in New York, New York.

About Guardion Health Sciences

Guardion Health Sciences, Inc., a clinical nutrition company, develops and distributes clinically supported dietary supplements and medical foods in North America, Europe, and internationally. The company offers GlaucoCetin, a dietary supplement to support mitochondrial function with additional antioxidants to help reduce oxidative stress and increase blood flow throughout the body for enhanced eye support and ocular health; and Lumega-Z, a medical food that replenishes and restores the macular protective pigment. It also provides Viactiv Omega Boost Gel Bites, an omega-3 fish oil dietary supplement. The company distributes medical foods products through e-commerce website, guardionhealth.com. Guardion Health Sciences, Inc. was founded in 2009 and is headquartered in Houston, California.