Gilead Sciences (NASDAQ:GILD) and Amgen (NASDAQ:AMGN) are both large-cap medical companies, but which is the better business? We will compare the two companies based on the strength of their valuation, dividends, institutional ownership, analyst recommendations, risk, earnings and profitability.
Volatility and Risk
Gilead Sciences has a beta of 0.51, meaning that its share price is 49% less volatile than the S&P 500. Comparatively, Amgen has a beta of 0.76, meaning that its share price is 24% less volatile than the S&P 500.
Analyst Recommendations
This is a summary of recent ratings and price targets for Gilead Sciences and Amgen, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Gilead Sciences | 2 | 15 | 11 | 0 | 2.32 |
Amgen | 1 | 12 | 17 | 0 | 2.53 |
Gilead Sciences presently has a consensus price target of $93.8276, indicating a potential upside of 48.16%. Amgen has a consensus price target of $255.52, indicating a potential upside of 4.09%. Given Gilead Sciences' higher probable upside, equities research analysts plainly believe Gilead Sciences is more favorable than Amgen.
Earnings & Valuation
This table compares Gilead Sciences and Amgen's gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Gilead Sciences | $22.45 billion | 3.54 | $5.39 billion | $6.14 | 10.31 |
Amgen | $23.36 billion | 6.12 | $7.84 billion | $14.82 | 16.56 |
Amgen has higher revenue and earnings than Gilead Sciences. Gilead Sciences is trading at a lower price-to-earnings ratio than Amgen, indicating that it is currently the more affordable of the two stocks.
Profitability
This table compares Gilead Sciences and Amgen's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Gilead Sciences | 5.48% | 37.77% | 12.76% |
Amgen | 29.42% | 95.55% | 15.52% |
Dividends
Gilead Sciences pays an annual dividend of $2.72 per share and has a dividend yield of 4.3%. Amgen pays an annual dividend of $6.40 per share and has a dividend yield of 2.6%. Gilead Sciences pays out 44.3% of its earnings in the form of a dividend. Amgen pays out 43.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Amgen has raised its dividend for 1 consecutive years.
Insider and Institutional Ownership
76.4% of Gilead Sciences shares are held by institutional investors. Comparatively, 75.2% of Amgen shares are held by institutional investors. 0.1% of Gilead Sciences shares are held by company insiders. Comparatively, 0.4% of Amgen 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.
Summary
Amgen beats Gilead Sciences on 13 of the 17 factors compared between the two stocks.