Merus (NASDAQ:MRUS) and Taro Pharmaceutical Industries (NYSE:TARO) are both medical companies, but which is the superior investment? We will compare the two companies based on the strength of their profitability, analyst recommendations, risk, institutional ownership, dividends, valuation and earnings.
Institutional and Insider Ownership
62.6% of Merus shares are held by institutional investors. Comparatively, 11.2% of Taro Pharmaceutical Industries shares are held by institutional investors. 7.4% of Merus shares are held by insiders. Comparatively, 13.8% of Taro Pharmaceutical Industries shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.
Profitability
This table compares Merus and Taro Pharmaceutical Industries' net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
Merus | -295.98% | -78.70% | -36.12% |
Taro Pharmaceutical Industries | -45.94% | 10.36% | 8.38% |
Earnings & Valuation
This table compares Merus and Taro Pharmaceutical Industries' top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
Merus | $31.13 million | 24.06 | $-55,150,000.00 | ($2.33) | -10.17 |
Taro Pharmaceutical Industries | $644.77 million | 4.33 | $244.24 million | $6.35 | 11.50 |
Taro Pharmaceutical Industries has higher revenue and earnings than Merus. Merus is trading at a lower price-to-earnings ratio than Taro Pharmaceutical Industries, indicating that it is currently the more affordable of the two stocks.
Analyst Recommendations
This is a breakdown of current ratings and price targets for Merus and Taro Pharmaceutical Industries, as reported by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
---|
Merus | 0 | 1 | 2 | 0 | 2.67 |
Taro Pharmaceutical Industries | 0 | 0 | 1 | 0 | 3.00 |
Merus presently has a consensus price target of $23.50, indicating a potential downside of 0.97%. Taro Pharmaceutical Industries has a consensus price target of $81.00, indicating a potential upside of 12.83%. Given Taro Pharmaceutical Industries' stronger consensus rating and higher possible upside, analysts plainly believe Taro Pharmaceutical Industries is more favorable than Merus.
Risk & Volatility
Merus has a beta of 0.83, suggesting that its share price is 17% less volatile than the S&P 500. Comparatively, Taro Pharmaceutical Industries has a beta of 0.92, suggesting that its share price is 8% less volatile than the S&P 500.
Summary
Taro Pharmaceutical Industries beats Merus on 10 of the 14 factors compared between the two stocks.