Psychemedics (NASDAQ:PMD – Get Free Report) and HH&L Acquisition (NYSE:HHLA – Get Free Report) are both small-cap medical companies, but which is the better business? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, profitability, valuation, earnings and analyst recommendations.
Analyst Recommendations
This is a summary of recent ratings for Psychemedics and HH&L Acquisition, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Psychemedics | 0 | 0 | 0 | 0 | N/A |
| HH&L Acquisition | 0 | 0 | 0 | 0 | N/A |
Earnings and Valuation
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Psychemedics | $24.59 million | 1.17 | -$1.08 million | ($0.27) | -18.52 |
| HH&L Acquisition | N/A | N/A | $17.69 million | $0.19 | 55.27 |
HH&L Acquisition has lower revenue, but higher earnings than Psychemedics. Psychemedics is trading at a lower price-to-earnings ratio than HH&L Acquisition, indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Psychemedics has a beta of 0.58, indicating that its share price is 42% less volatile than the S&P 500. Comparatively, HH&L Acquisition has a beta of -0.01, indicating that its share price is 101% less volatile than the S&P 500.
Profitability
This table compares Psychemedics and HH&L Acquisition’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Psychemedics | -6.13% | -13.52% | -7.77% |
| HH&L Acquisition | N/A | -55.99% | 2.76% |
Institutional and Insider Ownership
24.4% of Psychemedics shares are held by institutional investors. Comparatively, 49.9% of HH&L Acquisition shares are held by institutional investors. 24.0% of Psychemedics shares are held by company insiders. Comparatively, 0.5% of HH&L Acquisition shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Summary
HH&L Acquisition beats Psychemedics on 6 of the 10 factors compared between the two stocks.
About Psychemedics
Psychemedics Corporation provides testing services for the detection of drugs of abuse through the analysis of hair samples in the United States and internationally. The company offers screening and confirmation by mass spectrometry using industry-accepted practices for cocaine, marijuana, and PCP; amphetamines, including ecstasy, eve, and Adderall; opiates, such as heroin, hydrocodone, hydromorphone, oxycodone, oxymorphone, and codeine; synthetic cannabinoids comprising K2, Spice, and Blaze; benzodiazepines consisting of Xanax, Valium, and Ativan; and nicotine, Fentanyl, and alcohol. Its testing results provide quantitative information that could indicate the approximate amount of drug ingested, as well as historical data that could show a pattern of individual drug use over a longer period-of-time. The company offers its services to employers for applicant and employee testing; and treatment professionals, law enforcement agencies, school administrators, and parents concerned about their children's drug use. Psychemedics Corporation was incorporated in 1986 and is headquartered in Acton, Massachusetts.
About HH&L Acquisition
HH&L Acquisition Co. does not have significant operations. It focuses on effecting a merger, share exchange, asset acquisition, share purchase, reorganization, or similar business combination with one or more businesses. The company intends to focus on healthcare or healthcare-related companies in Asian markets. HH&L Acquisition Co. was incorporated in 2020 and is based in Central, Hong Kong.
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