Reviewing Merck KGaA (OTCMKTS:MKGAF) & China Pharma (NYSE:CPHI)

Earnings and Valuation

This table compares China Pharma and Merck KGaA”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
China Pharma	$4.05 million	1.56	-$3.08 million	($0.57)	-2.21
Merck KGaA	$22.72 billion	0.86	$3.06 billion	$6.81	22.23

Merck KGaA has higher revenue and earnings than China Pharma. China Pharma is trading at a lower price-to-earnings ratio than Merck KGaA, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares China Pharma and Merck KGaA’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
China Pharma	-85.56%	-63.93%	-31.42%
Merck KGaA	12.60%	10.17%	5.74%

Institutional and Insider Ownership

0.1% of Merck KGaA shares are held by institutional investors. 6.4% of China Pharma shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Volatility & Risk

China Pharma has a beta of 1.03, suggesting that its stock price is 3% more volatile than the S&P 500. Comparatively, Merck KGaA has a beta of 0.96, suggesting that its stock price is 4% less volatile than the S&P 500.

Summary

Merck KGaA beats China Pharma on 8 of the 11 factors compared between the two stocks.

About China Pharma

China Pharma Holdings, Inc. develops, manufactures, and markets generic and branded pharmaceutical, and biochemical products to hospitals and private retailers in the People’s Republic of China. The company provides products in the form of dry powder injectables, liquid injectables, tablets, capsules, and cephalosporin oral solutions. Its products include Cerebroprotein Hydroloysate injection to treat memory decline and attention deficit; Gastrodin injection for tiredness, loss of concentration, poor sleep, and traumatic syndromes of the brain; Propylgallate injection to treat cerebral thrombosis, coronary heart disease, and after surgery complications; Ozagrel Sodium to treat acute thrombotic cerebral infarction and dyskinesia; Alginic Sodium Diester injection for ischemic heart, cerebrovascular, and high lipoprotein blood diseases; Bumetanide injection to treat edema diseases; and Candesartan for hypertension. In addition, the company provides Roxithromycin dispersible tablets for pharyngitis and tonsillitis; Cefaclor dispersible tablets for tympanitis, lower respiratory tract infection, urinary tract infections, and skin/skin tissue infection; Cefalexin capsules for acute tonsillitis; Andrographolide for sore throat caused by upper respiratory tract infection; Clarithromycin granules and capsules; and Naproxen Sodium and PseudophedrineHydrochlorida sustained release tablets. Further it offers Hepatocyte growth-promoting factor, Tiopronin, Compound Ammonium Glycyrrhetate S, and Omeparzole for the treatment of digestive diseases. Additionally, the company provides Vitamin B6 injection; Granisetron Hydrochloride injection to treat nausea and vomiting caused by radiotherapy and chemotherapy during the treatment of malignant tumors; Noni Enzyme, a food supplement; sanitizers; and masks. It offers its products through distributors, its network of sales offices, and sales representatives. The company is based in Haikou, the People’s Republic of China.

About Merck KGaA

Merck KGaA operates as a science and technology company in Germany. It operates through Life Science, Healthcare, and Electronics segments. The company's Life Science segment offers tools, chemicals, and equipment for academic labs, biotech, and pharmaceutical manufacturers, as well as industrial sector. This segment provides drug manufacturers with process development expertise and technologies, such as continuous bioprocessing; testing kits and services; reagents and services; testing solutions that analyze air, water, and soil; and testing and tools, as well as products that help test nutritional value and identify quality inconsistencies. Its Healthcare segment discovers, develops, manufacturers, and markets prescription drugs and biopharmaceuticals for the treatment of oncology, neurology and immunology, fertility, endocrinology, as well as cardiovascular, diabetes, thyroid disorders, and multiple sclerosis; general medicines; and injection device and disease monitoring software. The Electronics segment supplies materials for the semiconductor and display industries and surface design, such as delivery systems and services, as well as surface solutions, including cosmetics, effect pigments, and functional solutions. In addition, it has in-licensing agreement with Debiopharm International SA for developing and commercializing drug candidates for the treatment of head and neck cancer; Jiangsu Hengrui Pharmaceuticals Co. Ltd. for developing, manufacturing, and commercializing drug candidates for the treatment of metastatic colorectal cancer; and Abbisko Therapeutics Co. Ltd. for developing and commercializing of drug candidates for the treatment of tenosynovial giant cell tumor, as well as license and collaboration agreement with Merck KGaA to discover two targeted protein degraders against critical oncogenic proteins. The company was founded in 1668 and is headquartered in Darmstadt, Germany. Merck KGaA operates as a subsidiary of E. Merck KGaA.