Head to Head Contrast: HUTCHMED (NASDAQ:HCM) versus NovoCure (NASDAQ:NVCR)

NovoCure (NASDAQ:NVCR) and HUTCHMED (NASDAQ:HCM) are both mid-cap medical companies, but which is the better business? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, profitability, valuation, earnings and analyst recommendations.

Profitability

This table compares NovoCure and HUTCHMED’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
NovoCure	-25.66%	-50.82%	-16.48%
HUTCHMED	N/A	N/A	N/A

Institutional and Insider Ownership

84.6% of NovoCure shares are held by institutional investors. Comparatively, 8.8% of HUTCHMED shares are held by institutional investors. 5.5% of NovoCure shares are held by company insiders. Comparatively, 3.6% of HUTCHMED shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Volatility & Risk

NovoCure has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500. Comparatively, HUTCHMED has a beta of 0.31, indicating that its share price is 69% less volatile than the S&P 500.

Valuation and Earnings

This table compares NovoCure and HUTCHMED”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
NovoCure	$655.35 million	3.17	-$136.23 million	($1.53)	-11.74
HUTCHMED	$548.51 million	3.81	$456.91 million	N/A	N/A

HUTCHMED has lower revenue, but higher earnings than NovoCure.

Analyst Recommendations

This is a summary of recent ratings for NovoCure and HUTCHMED, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
NovoCure	1	3	4	0	2.38
HUTCHMED	1	2	1	1	2.40

NovoCure currently has a consensus target price of $27.29, indicating a potential upside of 51.92%. HUTCHMED has a consensus target price of $16.88, indicating a potential upside of 40.74%. Given NovoCure’s higher possible upside, analysts plainly believe NovoCure is more favorable than HUTCHMED.

Summary

HUTCHMED beats NovoCure on 7 of the 13 factors compared between the two stocks.

About NovoCure

NovoCure Limited, an oncology company, engages in the development, manufacture, and commercialization of tumor treating fields (TTFields) devices for the treatment of solid tumor cancers in the United States, Germany, Japan, Greater China, and internationally. The company’s TTFields devices include Optune Gio and Optune Lua. It also has ongoing clinical trials investigating TTFields in brain metastases, gastric cancer, glioblastoma, liver cancer, non-small cell lung cancer, pancreatic cancer, and ovarian cancer. NovoCure Limited was incorporated in 2000 and is headquartered in Saint Helier, Jersey.

About HUTCHMED

HUTCHMED (China) Ltd. is a holding company, which engages in the research and development, manufacture, and sale of pharmaceuticals and health-oriented consumer products. It operates through the Oncology/Immunology and Other Ventures segments. The Oncology/Immunology segment includes the discovery, development, and commercialization of targeted therapies and immunotherapies for the treatment of cancer and immunological diseases. The Other Ventures segment involves the other commercial businesses which include the sales, marketing, manufacture, and distribution of prescription drugs and healthcare products. The company was founded on December 18, 2000 and is headquartered in Hong Kong.