Jazz Pharmaceuticals (NASDAQ:JAZZ) and Merck & Co., Inc. (NYSE:MRK) are both medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their profitability, analyst recommendations, institutional ownership, earnings, risk, dividends and valuation.
Valuation and Earnings
This table compares Jazz Pharmaceuticals and Merck & Co., Inc.'s revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
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Jazz Pharmaceuticals | $2.16 billion | 4.40 | $523.37 million | $14.60 | 11.57 |
Merck & Co., Inc. | $46.84 billion | 4.19 | $9.84 billion | $5.19 | 14.93 |
Merck & Co., Inc. has higher revenue and earnings than Jazz Pharmaceuticals. Jazz Pharmaceuticals is trading at a lower price-to-earnings ratio than Merck & Co., Inc., indicating that it is currently the more affordable of the two stocks.
Volatility & Risk
Jazz Pharmaceuticals has a beta of 1.08, meaning that its stock price is 8% more volatile than the S&P 500. Comparatively, Merck & Co., Inc. has a beta of 0.43, meaning that its stock price is 57% less volatile than the S&P 500.
Institutional & Insider Ownership
95.7% of Jazz Pharmaceuticals shares are owned by institutional investors. Comparatively, 72.9% of Merck & Co., Inc. shares are owned by institutional investors. 4.6% of Jazz Pharmaceuticals shares are owned by insiders. Comparatively, 0.3% of Merck & Co., Inc. shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company is poised for long-term growth.
Analyst Recommendations
This is a breakdown of recent ratings and target prices for Jazz Pharmaceuticals and Merck & Co., Inc., as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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Jazz Pharmaceuticals | 1 | 1 | 16 | 0 | 2.83 |
Merck & Co., Inc. | 0 | 2 | 11 | 0 | 2.85 |
Jazz Pharmaceuticals currently has a consensus target price of $186.7778, indicating a potential upside of 10.58%. Merck & Co., Inc. has a consensus target price of $96.2727, indicating a potential upside of 24.27%. Given Merck & Co., Inc.'s stronger consensus rating and higher probable upside, analysts clearly believe Merck & Co., Inc. is more favorable than Jazz Pharmaceuticals.
Profitability
This table compares Jazz Pharmaceuticals and Merck & Co., Inc.'s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
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Jazz Pharmaceuticals | 7.86% | 20.16% | 10.85% |
Merck & Co., Inc. | 24.33% | 53.83% | 16.83% |