Cara Therapeutics Inc. (CARA -5.04%) and its partner Fresenius Medical Care AG & Co. (FMS -2.26%) are about as different as night and day. Cara is a clinical-stage biotech with no steady revenue yet. Fresenius is a dialysis services giant that has made nearly $20 billion over the last 12 months. But while Fresenius' share price has fallen slightly so far in 2018, Cara stock has soared nearly 70%.

Which of these stocks is the better buy for investors now, though? Here's how Cara Therapeutics and Fresenius Medical Care stack up against each other. 

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The case for Cara Therapeutics

I think there are three key reasons why buying Cara Therapeutics stock makes sense. The most important reason is the prospects for the biotech's lead candidate, Korsuva. The drug is currently being evaluated in two late-stage clinical studies for treating chronic kidney disease-associated pruritus (CKD-aP) in patients on hemodialysis. 

CKD-aP affects around 60% of dialysis patients, but there is no approved treatment in the U.S. or in Europe. That means the market should be wide open for Cara if Korsuva is successful in its phase 3 studies. We'll know if success has been achieved when the company reports results from the studies next year. Based on previous studies, I'm cautiously optimistic.

The second reason Cara looks like a good stock to buy is its partnership with Vifor Fresenius Medical Care Renal Pharma, a joint venture between Swiss drugmaker Vifor Pharma Group and Fresenius. Aside from some nice financial aspects to the deal for Cara, what I really like about its relationship with the joint venture is that Fresenius intends to promote Korsuva in all of its dialysis clinics in the U.S. assuming the drug wins approval.

Then there's my third argument in favor of Cara -- the potential for the biotech to move into additional markets. An intravenous version of Korsuva (known as CR-845) performed well in a phase 2/3 study for the management of pain in patients undergoing abdominal surgery. Cara is exploring the use of Korsuva in treating chronic liver disease-associated pruritus (CLD-aP). There's also a big opportunity for the drug in treating CKD-aP in patients who aren't yet on dialysis.

The case for Fresenius Medical Care

Although Fresenius Medical Care is much larger than Cara, in my view the rationale for buying the stock is simpler. In a nutshell, the main reason to buy Fresenius is that demand should increase for kidney dialysis services and the company is the top provider of those services. 

Why will demand for kidney dialysis services increase? It comes down to demographics. Older individuals are more likely to require dialysis. The baby boomer generation is increasing the ranks of potential dialysis patients. Fresenius projects a 6% global compound annual growth rate (CAGR) for dialysis patients through 2025.

Fresenius and its main rival, DaVita, pretty much enjoy a duopoly in the U.S. dialysis market. But Fresenius is the leader with around 2,400 U.S. clinics. The company also has over 1,360 clinics in other countries throughout the world. If demand for dialysis services increase, you can bet that Fresenius will profit from it. 

I think that Fresenius has an opportunity to extend its lead even further with its pending acquisition of NxStage Medical. NxStage makes home hemodialysis machines. Fresenius thinks that it can achieve significant growth by expanding more into the home dialysis market. 

Better buy

Is Cara Therapeutics the better stock to buy or is Fresenius Medical Care? The answer, in my opinion, is: "It depends."

If you're a more cautious investor, Fresenius is definitely more up your alley. The company has a solid business model, steady revenue, and pretty good growth prospects. Fresenius also pays a modest dividend that currently yields 1.26%.

On the other hand, if you're an aggressive investor, there's a lot to like about Cara. Positive results for Korsuva should send this biotech stock much higher. However, Cara stock is considerably riskier than Fresenius due to the possibility that clinical studies for Korsuva won't be successful.

I lean more toward the aggressive style of investing, so my pick between these two partners is Cara Therapeutics. I like the chances for Korsuva in CKD-aP and expect the company will have a good shot at success in CLD-aP as well.