Financial Comparison: Novan (NOVN) & AbbVie (ABBV)

Novan (NASDAQ: NOVN) and AbbVie (NYSE:ABBV) are both medical companies, but which is the better stock? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, institutional ownership, risk and earnings.

Profitability

This table compares Novan and AbbVie’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Novan N/A -194.61% -99.61%
AbbVie 24.77% 150.27% 12.52%

Analyst Ratings

This is a summary of current ratings and recommmendations for Novan and AbbVie, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Novan 0 1 3 0 2.75
AbbVie 0 6 6 0 2.50

Novan presently has a consensus target price of $17.24, suggesting a potential upside of 167.33%. AbbVie has a consensus target price of $80.18, suggesting a potential downside of 8.62%. Given Novan’s stronger consensus rating and higher probable upside, equities research analysts plainly believe Novan is more favorable than AbbVie.

Dividends

AbbVie pays an annual dividend of $2.56 per share and has a dividend yield of 2.9%. Novan does not pay a dividend. AbbVie pays out 62.9% of its earnings in the form of a dividend. AbbVie has increased its dividend for 44 consecutive years.

Valuation and Earnings

This table compares Novan and AbbVie’s revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Novan $768,999.00 134.07 -$49.04 million ($7.93) -0.81
AbbVie $26.71 billion 5.24 $11.57 billion $4.07 21.56

AbbVie has higher revenue and earnings than Novan. Novan is trading at a lower price-to-earnings ratio than AbbVie, indicating that it is currently the more affordable of the two stocks.

Institutional and Insider Ownership

6.1% of Novan shares are owned by institutional investors. Comparatively, 68.3% of AbbVie shares are owned by institutional investors. 10.7% of Novan shares are owned by company insiders. Comparatively, 0.2% of AbbVie shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Summary

AbbVie beats Novan on 10 of the 15 factors compared between the two stocks.

Novan Company Profile

Novan, Inc. is a late-stage pharmaceutical company. The Company is engaged in the development and commercialization of therapies using its nitric oxide platform. The Company develops product candidates using its Nitricil technology, which enables the Company to engineer tunable new chemical entities (NCEs). The Company’s formulation science enables it to further tune the release of nitric oxide when applied to the skin by using the combinations of inactive ingredients. It is developing SB204 for the treatment of acne vulgaris in Phase III. The Company is developing its product candidate, SB206, for the treatment of external genital and perianal warts in Phase II. It is developing SB208, an investigational topical anti-fungal for the treatment of fungal infections of the skin and nails. It is developing SB204 for the treatment of inflammatory skin diseases. Its pipeline also includes SB414, a topical cream product candidate.

AbbVie Company Profile

AbbVie Inc. (AbbVie) is a research-based biopharmaceutical company. The Company is engaged in the discovery, development, manufacture and sale of a range of pharmaceutical products. Its products are focused on treating conditions, such as chronic autoimmune diseases in rheumatology, gastroenterology and dermatology; oncology, including blood cancers; virology, including hepatitis C virus (HCV) and human immunodeficiency virus (HIV); neurological disorders, such as Parkinson’s disease and multiple sclerosis; metabolic diseases, including thyroid disease and complications associated with cystic fibrosis, and other serious health conditions. It offers products in various categories, including HUMIRA (adalimumab), Oncology products, Virology Products, Additional Virology products, Metabolics/Hormones products, Endocrinology products and other products, which include Duopa and Duodopa (carbidopa and levodopa), Anesthesia products and ZINBRYTA (daclizumab).

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