NovoCure (NASDAQ:NVCR) and Baxter International (NYSE:BAX) are both large-cap medical companies, but which is the superior business? We will compare the two companies based on the strength of their risk, profitability, dividends, institutional ownership, valuation, earnings and analyst recommendations.
Insider & Institutional Ownership
71.1% of NovoCure shares are owned by institutional investors. Comparatively, 82.9% of Baxter International shares are owned by institutional investors. 5.1% of NovoCure shares are owned by company insiders. Comparatively, 0.1% of Baxter International shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.
Analyst Recommendations
This is a breakdown of recent ratings and price targets for NovoCure and Baxter International, as provided by MarketBeat.com.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score |
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NovoCure | 1 | 4 | 4 | 0 | 2.33 |
Baxter International | 0 | 6 | 10 | 0 | 2.63 |
NovoCure presently has a consensus target price of $126.00, indicating a potential downside of 27.22%. Baxter International has a consensus target price of $92.2667, indicating a potential upside of 17.52%. Given Baxter International's stronger consensus rating and higher possible upside, analysts clearly believe Baxter International is more favorable than NovoCure.
Profitability
This table compares NovoCure and Baxter International's net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets |
---|
NovoCure | 4.26% | 7.40% | 3.94% |
Baxter International | 7.90% | 20.81% | 8.78% |
Volatility & Risk
NovoCure has a beta of 1.29, suggesting that its stock price is 29% more volatile than the S&P 500. Comparatively, Baxter International has a beta of 0.65, suggesting that its stock price is 35% less volatile than the S&P 500.
Earnings & Valuation
This table compares NovoCure and Baxter International's top-line revenue, earnings per share and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio |
---|
NovoCure | $351.32 million | 50.17 | $-7,230,000.00 | ($0.07) | -2,473.29 |
Baxter International | $11.36 billion | 3.49 | $1.00 billion | $3.31 | 23.72 |
Baxter International has higher revenue and earnings than NovoCure. NovoCure is trading at a lower price-to-earnings ratio than Baxter International, indicating that it is currently the more affordable of the two stocks.
Summary
Baxter International beats NovoCure on 10 of the 14 factors compared between the two stocks.