Comparing Novo Nordisk A/S (NVO) & Taro Pharmaceutical Industries (TARO)
Novo Nordisk A/S (NYSE: NVO) and Taro Pharmaceutical Industries (NYSE:TARO) are both mid-cap medical companies, but which is the better investment? We will compare the two businesses based on the strength of their profitabiliy, valuation, dividends, institutional ownership, earnings, risk and analyst recommendations.
Novo Nordisk A/S pays an annual dividend of $0.81 per share and has a dividend yield of 2.0%. Taro Pharmaceutical Industries does not pay a dividend. Novo Nordisk A/S pays out 35.8% of its earnings in the form of a dividend. Novo Nordisk A/S has increased its dividend for 20 consecutive years.
Valuation and Earnings
This table compares Novo Nordisk A/S and Taro Pharmaceutical Industries’ gross revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Novo Nordisk A/S||$17.67 billion||4.57||$8.25 billion||$2.26||18.21|
|Taro Pharmaceutical Industries||$879.39 million||5.04||$530.06 million||$11.06||9.89|
Novo Nordisk A/S has higher revenue and earnings than Taro Pharmaceutical Industries. Taro Pharmaceutical Industries is trading at a lower price-to-earnings ratio than Novo Nordisk A/S, indicating that it is currently the more affordable of the two stocks.
This table compares Novo Nordisk A/S and Taro Pharmaceutical Industries’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Novo Nordisk A/S||34.21%||90.57%||41.83%|
|Taro Pharmaceutical Industries||51.90%||23.08%||20.63%|
Institutional and Insider Ownership
6.4% of Novo Nordisk A/S shares are owned by institutional investors. Comparatively, 16.4% of Taro Pharmaceutical Industries shares are owned by institutional investors. 13.8% of Taro Pharmaceutical Industries shares are owned 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 is a summary of current recommendations and price targets for Novo Nordisk A/S and Taro Pharmaceutical Industries, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Novo Nordisk A/S||4||6||3||0||1.92|
|Taro Pharmaceutical Industries||0||1||0||0||2.00|
Novo Nordisk A/S presently has a consensus target price of $57.00, suggesting a potential upside of 38.52%. Given Novo Nordisk A/S’s higher probable upside, analysts plainly believe Novo Nordisk A/S is more favorable than Taro Pharmaceutical Industries.
Volatility and Risk
Novo Nordisk A/S has a beta of 0.63, indicating that its share price is 37% less volatile than the S&P 500. Comparatively, Taro Pharmaceutical Industries has a beta of 0.64, indicating that its share price is 36% less volatile than the S&P 500.
Novo Nordisk A/S beats Taro Pharmaceutical Industries on 9 of the 17 factors compared between the two stocks.
Novo Nordisk A/S Company Profile
Novo Nordisk A/S is a global healthcare company engaged in diabetes care. The Company is also engaged in the discovery, development, manufacturing and marketing of pharmaceutical products. The Company operates through two business segments: diabetes and obesity care, and biopharmaceuticals. The Company’s diabetes and obesity care segment covers insulin, GLP-1, other protein-related products, such as glucagon, protein-related delivery systems and needles, and oral anti-diabetic drugs. The Company’s biopharmaceuticals segment covers the therapy areas of hemophilia care, growth hormone therapy and hormone replacement therapy. The Company also offers Saxenda product to treat obesity. It offers a range of products, including NovoLog/NovoRapid; NovoLog Mix/NovoMix; Prandin/NovoNorm; NovoSeven; Norditropin, and Vagifem. As of December 31, 2016, it marketed its products in over 180 countries. Its regional structure consists of two commercial units: North America and International Operations.
Taro Pharmaceutical Industries Company Profile
Taro Pharmaceutical Industries Ltd. (Taro) is a science-based pharmaceutical company. The Company operates principally through three entities: Taro Pharmaceutical Industries Ltd. (Taro Israel), and two of its subsidiaries, Taro Pharmaceuticals Inc. (Taro Canada) and Taro U.S.A. The Company markets over 200 pharmaceutical products in over 25 countries. The Company’s owned product brands include Rokacet, with generic names, such as acetaminophen, codeine and caffeine; Topicort, with the generic name, desoximetasone; Etopan, with the generic name etodolac, and Ovide, with the generic name, malathion, among others. The Company’s other generic products include acetazolamide, adapalene, alclometasone dipropionate, amiodarone hydrochloride, ammonium lactate, augmented betamethasone dipropionate, cetirizine hydrochloride, clobetasol propionate, clomipramine hydrochloride, clorazepate dipotassium, fluorouracil, ketoconazole, metronidazole, mupirocin and warfarin sodium, among others.
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