Contrasting Johnson & Johnson (NYSE:JNJ) & Recordati Industria Chimica E Farmaceutica (OTCMKTS:RCDTF)

Recordati Industria Chimica E Farmaceutica (OTCMKTS:RCDTF) and Johnson & Johnson (NYSE:JNJ) are both large-cap healthcare companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, valuation, risk, dividends, analyst recommendations, institutional ownership and earnings.

Insider & Institutional Ownership

69.6% of Johnson & Johnson shares are held by institutional investors. 0.2% of Johnson & Johnson shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Volatility and Risk

Recordati Industria Chimica E Farmaceutica has a beta of 0.25, suggesting that its stock price is 75% less volatile than the S&P 500. Comparatively, Johnson & Johnson has a beta of 0.24, suggesting that its stock price is 76% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of current ratings and target prices for Recordati Industria Chimica E Farmaceutica and Johnson & Johnson, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Recordati Industria Chimica E Farmaceutica	0	1	0	1	3.00
Johnson & Johnson	0	6	18	1	2.80

Johnson & Johnson has a consensus target price of $274.13, suggesting a potential upside of 1.18%. Given Johnson & Johnson’s higher probable upside, analysts plainly believe Johnson & Johnson is more favorable than Recordati Industria Chimica E Farmaceutica.

Profitability

This table compares Recordati Industria Chimica E Farmaceutica and Johnson & Johnson’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Recordati Industria Chimica E Farmaceutica	18.38%	33.73%	12.76%
Johnson & Johnson	21.48%	32.42%	13.35%

Valuation & Earnings

This table compares Recordati Industria Chimica E Farmaceutica and Johnson & Johnson”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Recordati Industria Chimica E Farmaceutica	$2.96 billion	4.04	$501.92 million	$2.80	20.71
Johnson & Johnson	$97.93 billion	6.67	$26.80 billion	$8.63	31.40

Johnson & Johnson has higher revenue and earnings than Recordati Industria Chimica E Farmaceutica. Recordati Industria Chimica E Farmaceutica is trading at a lower price-to-earnings ratio than Johnson & Johnson, indicating that it is currently the more affordable of the two stocks.

Summary

Johnson & Johnson beats Recordati Industria Chimica E Farmaceutica on 11 of the 14 factors compared between the two stocks.

About Recordati Industria Chimica E Farmaceutica

Recordati Industria Chimica e Farmaceutica S.p.A., together with its subsidiaries, engages in the research, development, manufacture, and marketing of pharmaceuticals worldwide. The company operates through Specialty and Primary Care and Rare Diseases segments. Its product pipeline includes REC 0559 which is in Phase II for the treatment of Neurotrophic Keratitis; REC 0545 for acute decompensation in maple syrup urine diseases; ISTURISA for endogenous Cushing's syndrome; and CYSTADROPS, an corneal cystine deposits in patients with cystinosis. The company also develops CARBAGLU for hyperammonemia due to NAGS deficiency; QARZIBA, an apeiron for the treatment of high-risk neuroblastoma patients with a partial response at the chemotherapeutical through myeloablative therapy and stem cell transplantation, and relapsed or refractory neuroblastoma. In addition, it offers SYLVANT for the treatment of idiopathic multicentric Castleman diseases; REAGILA for Schizophrenia; and ELIGARD for hormone-dependent prostate cancer, as well as CAPHOSOL, a medical device for treatment of oral mucositis due to chemo and radiation therapy. The company was founded in 1926 and is headquartered in Milan, Italy. Recordati Industria Chimica e Farmaceutica S.p.A. operates as a subsidiary of Rossini S.à R.L.

About Johnson & Johnson

Johnson & Johnson is a holding company, which engages in the research, development, manufacture, and sale of products in the healthcare field. It operates through the Innovative Medicine and MedTech segments. The Innovative Medicine segment focuses on immunology, infectious diseases, neuroscience, oncology, cardiovascular and metabolism, and pulmonary hypertension. The MedTech segment includes a portfolio of products used in the interventional solutions, orthopaedics, surgery, and vision categories. The company was founded by Robert Wood Johnson I, James Wood Johnson, and Edward Mead Johnson Sr. in 1887 and is headquartered in New Brunswick, NJ.