Merck & (NYSE: MRK) and Akorn (NASDAQ:AKRX) are both mid-cap medical companies, but which is the superior investment? We will compare the two companies based on the strength of their valuation, profitability, dividends, risk, analyst recommendations, earnings and institutional ownership.
This is a summary of recent recommendations and price targets for Merck & and Akorn, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Merck & pays an annual dividend of $1.88 per share and has a dividend yield of 3.4%. Akorn does not pay a dividend. Merck & pays out 112.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Akorn has increased its dividend for 5 consecutive years.
Institutional and Insider Ownership
73.0% of Merck & shares are held by institutional investors. Comparatively, 74.7% of Akorn shares are held by institutional investors. 0.3% of Merck & shares are held by company insiders. Comparatively, 28.2% of Akorn shares are held by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
This table compares Merck & and Akorn’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Volatility and Risk
Merck & has a beta of 0.78, meaning that its stock price is 22% less volatile than the S&P 500. Comparatively, Akorn has a beta of 1.33, meaning that its stock price is 33% more volatile than the S&P 500.
Valuation & Earnings
This table compares Merck & and Akorn’s gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||NetIncome||Earnings Per Share||Price/Earnings Ratio|
|Merck &||$39.81 billion||3.78||$3.92 billion||$1.67||33.05|
|Akorn||$1.12 billion||3.74||$184.24 million||$0.99||33.74|
Merck & has higher revenue and earnings than Akorn. Merck & is trading at a lower price-to-earnings ratio than Akorn, indicating that it is currently the more affordable of the two stocks.
Merck & beats Akorn on 11 of the 17 factors compared between the two stocks.
Merck & Company Profile
Merck & Co., Inc. is a global healthcare company. The Company offers health solutions through its prescription medicines, vaccines, biologic therapies and animal health products. It operates through four segments: Pharmaceutical, Animal Health, Healthcare Services and Alliances. The Company’s Pharmaceutical segment includes human health pharmaceutical and vaccine products marketed either directly by the Company or through joint ventures. Human health pharmaceutical products consist of therapeutic and preventive agents, generally sold by prescription, for the treatment of human disorders. The Company sells its human health pharmaceutical products primarily to drug wholesalers and retailers, hospitals, government agencies and managed healthcare providers, such as health maintenance organizations, pharmacy benefit managers and other institutions. Vaccine products consist of preventive pediatric, adolescent and adult vaccines, primarily administered at physician offices.
Akorn Company Profile
Akorn Inc. (Akorn), together with its subsidiaries, is a specialty generic pharmaceutical company that develops, manufactures and markets generic and branded prescription pharmaceuticals, as well as private-label over-the-counter (OTC) consumer health products and animal health pharmaceuticals. The Company operates through two segments: Prescription Pharmaceuticals and the Consumer Health. The Prescription Pharmaceuticals segment consists of generic and branded prescription pharmaceuticals in a range of dosage forms, including sterile ophthalmics, injectables and inhalants and non-sterile oral liquids, topicals and nasal sprays and otics. The Consumer Health segment consists of branded and private-label OTC products and animal health products dispensed by veterinary professionals. Its branded and private-label OTC products are focused on ophthalmics, including a dry eye treatment TheraTears Therapy for Your Eyes.
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