Financial Review: Sanofi (SNY) & Johnson & Johnson (JNJ)
Sanofi (NYSE: SNY) and Johnson & Johnson (NYSE:JNJ) are both large-cap medical companies, but which is the better business? We will contrast the two companies based on the strength of their dividends, analyst recommendations, earnings, institutional ownership, profitability, valuation and risk.
Volatility & Risk
Sanofi has a beta of 0.88, suggesting that its stock price is 12% less volatile than the S&P 500. Comparatively, Johnson & Johnson has a beta of 0.78, suggesting that its stock price is 22% less volatile than the S&P 500.
Earnings and Valuation
This table compares Sanofi and Johnson & Johnson’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Sanofi||$42.69 billion||2.88||$12.81 billion||$3.92||12.49|
|Johnson & Johnson||$72.53 billion||4.89||$25.15 billion||$5.92||22.33|
Johnson & Johnson has higher revenue and earnings than Sanofi. Sanofi is trading at a lower price-to-earnings ratio than Johnson & Johnson, indicating that it is currently the more affordable of the two stocks.
Sanofi pays an annual dividend of $1.10 per share and has a dividend yield of 2.2%. Johnson & Johnson pays an annual dividend of $3.36 per share and has a dividend yield of 2.5%. Sanofi pays out 28.1% of its earnings in the form of a dividend. Johnson & Johnson pays out 56.8% 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. Johnson & Johnson has increased its dividend for 54 consecutive years. Johnson & Johnson is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
This table compares Sanofi and Johnson & Johnson’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Johnson & Johnson||22.52%||26.76%||13.19%|
Institutional & Insider Ownership
9.3% of Sanofi shares are held by institutional investors. Comparatively, 66.0% of Johnson & Johnson shares are held by institutional investors. 1.0% of Sanofi shares are held by company insiders. Comparatively, 0.2% of Johnson & Johnson shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
This is a breakdown of current ratings and recommmendations for Sanofi and Johnson & Johnson, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Johnson & Johnson||3||7||8||0||2.28|
Sanofi currently has a consensus price target of $53.50, suggesting a potential upside of 9.27%. Johnson & Johnson has a consensus price target of $132.25, suggesting a potential upside of 0.03%. Given Sanofi’s higher probable upside, equities analysts plainly believe Sanofi is more favorable than Johnson & Johnson.
Johnson & Johnson beats Sanofi on 11 of the 17 factors compared between the two stocks.
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.
About Johnson & Johnson
Johnson & Johnson is a holding company, which is engaged in the research and development, manufacture and sale of a range of products in the healthcare field. It operates through three segments: Consumer, Pharmaceutical and Medical Devices. Its primary focus is products related to human health and well-being. The Consumer segment includes a range of products used in the baby care, oral care, skin care, over-the-counter pharmaceutical, women’s health and wound care markets. The Pharmaceutical segment is focused on five therapeutic areas, including immunology, infectious diseases, neuroscience, oncology, and cardiovascular and metabolic diseases. The Medical Devices segment includes a range of products used in the orthopedic, surgery, cardiovascular, diabetes care and vision care fields. Its research facilities are located in the United States, Belgium, Brazil, Canada, China, France, Germany, India, Israel, Japan, the Netherlands, Singapore, Switzerland and the United Kingdom.
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