Novartis (NYSE:NVS) and Chembio Diagnostics (NASDAQ:CEMI) are both medical companies, but which is the better investment? We will compare the two businesses based on the strength of their risk, valuation, analyst recommendations, institutional ownership, earnings, dividends and profitability.

Analyst Ratings

This is a summary of current ratings and recommmendations for Novartis and Chembio Diagnostics, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Novartis 3 5 6 1 2.33
Chembio Diagnostics 0 0 3 0 3.00

Novartis presently has a consensus price target of $89.25, indicating a potential upside of 1.97%. Chembio Diagnostics has a consensus price target of $11.50, indicating a potential upside of 64.52%. Given Chembio Diagnostics’ stronger consensus rating and higher possible upside, analysts clearly believe Chembio Diagnostics is more favorable than Novartis.

Risk and Volatility

Novartis has a beta of 0.73, indicating that its share price is 27% less volatile than the S&P 500. Comparatively, Chembio Diagnostics has a beta of 1.59, indicating that its share price is 59% more volatile than the S&P 500.

Institutional & Insider Ownership

11.2% of Novartis shares are held by institutional investors. Comparatively, 40.5% of Chembio Diagnostics shares are held by institutional investors. 0.0% of Novartis shares are held by insiders. Comparatively, 4.7% of Chembio Diagnostics shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Dividends

Novartis pays an annual dividend of $1.91 per share and has a dividend yield of 2.2%. Chembio Diagnostics does not pay a dividend. Novartis pays out 39.7% of its earnings in the form of a dividend.

Valuation and Earnings

This table compares Novartis and Chembio Diagnostics’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Novartis $49.11 billion 4.12 $7.70 billion $4.81 18.20
Chembio Diagnostics $24.01 million 5.00 -$6.37 million ($0.52) -13.44

Novartis has higher revenue and earnings than Chembio Diagnostics. Chembio Diagnostics is trading at a lower price-to-earnings ratio than Novartis, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Novartis and Chembio Diagnostics’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Novartis 25.98% 15.81% 8.58%
Chembio Diagnostics -21.04% -34.10% -26.07%

Summary

Novartis beats Chembio Diagnostics on 10 of the 17 factors compared between the two stocks.

Novartis Company Profile

Novartis AG researches, develops, manufactures, and markets a range of healthcare products worldwide. The company's Innovative Medicines segment offers patented prescription medicines to enhance health outcomes for patients and health-care providers. This segment also commercializes products in the areas of oncology and rare diseases, ophthalmology, immunology and dermatology, neuroscience, respiratory, cardio-metabolic, and established medicines. The Sandoz segment provides active ingredients and finished dosage forms of pharmaceuticals in the areas of cardiovascular, central nervous system, dermatology, gastrointestinal and hormonal therapies, metabolism, oncology, ophthalmic, pain, and respiratory; active pharmaceutical ingredients and intermediates primarily antibiotics; protein or other biotechnology-based products, including biosimilars; and biotechnology manufacturing services. The Alcon segment offers eye care products, such as eye care devices for cataract, retinal, glaucoma, and refractive surgery, as well as intraocular lenses to treat cataracts and refractive errors; viscoelastics, surgical solutions, surgical packs, and other disposable products for cataract and vitreoretinal surgery; and contact lenses, as well as contact lens care products, including multi-purpose and hydrogen-peroxide based solutions, rewetting drops, and daily protein removers. Novartis AG has collaboration agreements with Xencor; QIAGEN N.V.; Surface Oncology; Intellia Therapeutics; Caribou Biosciences; Bristol-Myers Squibb; IBM Watson Health; Amgen; Allergan plc; Science 37, Inc.; Bill & Melinda Gates Foundation; PEAR Therapeutics; Pfizer; and Conatus Pharmaceuticals Inc. Novartis AG was founded in 1895 and is headquartered in Basel, Switzerland.

Chembio Diagnostics Company Profile

Chembio Diagnostics, Inc., together with its subsidiaries, develops, manufactures, and commercializes point-of-care (POC) diagnostic tests that are used to detect or monitor diseases. It offers tests for HIV and Syphilis, and Zika virus. The company also develops tests for malaria, Dengue virus, chikungunya virus, Ebola, Lassa, Marburg, leptospirosis, Rickettsia typhi, Burkholderia pseudomallei, and Orientia tsutsugamushi. It sells its products under the STAT-PAK, SURE CHECK, STAT VIEW, or DPP trademarks, as well as under the private labels of its marketing partners to medical laboratories and hospitals, governmental and public health entities, non-governmental organizations, medical professionals, and retail establishments in the United States and internationally. The company has collaboration agreements with Concussion Science Group Division of Perseus Science Group LLC for the development of a POC diagnostic test for traumatic brain injury; international diagnostics company to develop a POC diagnostic test for a specific type of cancer; and AstraZeneca for the development of a POC assay for a novel biomarker, as well as with LumiraDx to develop POC diagnostic tests. Chembio Diagnostics, Inc. was founded in 1985 and is headquartered in Medford, New York.

Receive News & Ratings for Novartis Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Novartis and related companies with MarketBeat.com's FREE daily email newsletter.