Teva Pharmaceutical Industries (NYSE: TEVA) and Sanofi (NYSE:SNY) are both large-cap healthcare companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, valuation, analyst recommendations, institutional ownership, profitability, risk and earnings.
Institutional and Insider Ownership
52.1% of Teva Pharmaceutical Industries shares are held by institutional investors. Comparatively, 9.1% of Sanofi shares are held by institutional investors. 7.1% of Teva Pharmaceutical Industries shares are held by insiders. Comparatively, 1.0% of Sanofi shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.
Earnings & Valuation
This table compares Teva Pharmaceutical Industries and Sanofi’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Teva Pharmaceutical Industries||$21.90 billion||0.70||$329.00 million||($5.87)||-2.56|
|Sanofi||$37.43 billion||2.92||$4.86 billion||$3.92||11.04|
Sanofi has higher revenue and earnings than Teva Pharmaceutical Industries. Teva Pharmaceutical Industries is trading at a lower price-to-earnings ratio than Sanofi, indicating that it is currently the more affordable of the two stocks.
Teva Pharmaceutical Industries pays an annual dividend of $0.72 per share and has a dividend yield of 4.8%. Sanofi pays an annual dividend of $1.10 per share and has a dividend yield of 2.5%. Teva Pharmaceutical Industries pays out -12.3% of its earnings in the form of a dividend. Sanofi pays out 28.1% 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. Teva Pharmaceutical Industries is clearly the better dividend stock, given its higher yield and lower payout ratio.
Volatility and Risk
Teva Pharmaceutical Industries has a beta of 0.55, meaning that its share price is 45% less volatile than the S&P 500. Comparatively, Sanofi has a beta of 0.86, meaning that its share price is 14% less volatile than the S&P 500.
This is a summary of recent ratings and target prices for Teva Pharmaceutical Industries and Sanofi, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Teva Pharmaceutical Industries||5||15||6||0||2.04|
Teva Pharmaceutical Industries currently has a consensus price target of $21.22, indicating a potential upside of 41.46%. Sanofi has a consensus price target of $53.50, indicating a potential upside of 23.59%. Given Teva Pharmaceutical Industries’ higher possible upside, analysts plainly believe Teva Pharmaceutical Industries is more favorable than Sanofi.
This table compares Teva Pharmaceutical Industries and Sanofi’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Teva Pharmaceutical Industries||-24.35%||15.70%||5.12%|
Sanofi beats Teva Pharmaceutical Industries on 10 of the 16 factors compared between the two stocks.
About Teva Pharmaceutical Industries
Teva Pharmaceutical Industries Limited is a pharmaceutical company. The Company is engaged in developing, producing and marketing generic medicines and a portfolio of specialty medicines. The Company operates through two segments: Generic medicines and Specialty medicines. The Company develops, manufactures and sells generic medicines in a range of dosage forms, including tablets, capsules, injectables, inhalants, liquids, ointments and creams. Its specialty medicines business focuses on delivering a range of solutions to patients and providers through medicines, devices and services in various regions and markets around the world. Its specialty medicines business includes its core therapeutic areas of central nervous system (CNS) and respiratory medicines with a focus on asthma and chronic obstructive pulmonary disease. It also has specialty products in oncology, women’s health and selected other areas.
Sanofi is a healthcare company, focused on patient needs and engaged in the research, development, manufacture and marketing of therapeutic solutions. The Company’s segments are Pharmaceuticals, Human Vaccines (Vaccines), and Other. The Pharmaceuticals segment comprises the commercial operations of various franchises, including Speciality Care (Rare Diseases, Multiple Sclerosis, and Oncology), Diabetes and Cardiovascular, Established Prescription Products, Consumer Healthcare and Generics, and research and development, production and marketing activities for all of the Company’s pharmaceuticals operations. The Vaccines segment is dedicated to vaccines and includes the commercial operations of the Company’s vaccines division Sanofi Pasteur and dedicated research and development, production and marketing activities for the Company’s vaccines operations. Its Rare Diseases products include Cerezyme, Cerdelga, Myozyme and Lumizyme, Fabrazyme, and Aldurazyme.
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