Novartis AG (NYSE: NVS) and Innocoll Holdings PLC (NASDAQ:INNL) are both medical companies, but which is the better stock? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, risk, dividends and institutional ownership.

Dividends

Novartis AG pays an annual dividend of $2.30 per share and has a dividend yield of 2.8%. Innocoll Holdings PLC does not pay a dividend. Novartis AG pays out 83.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Profitability

This table compares Novartis AG and Innocoll Holdings PLC’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Novartis AG 13.52% 15.51% 8.41%
Innocoll Holdings PLC -1,051.20% N/A -138.53%

Volatility and Risk

Novartis AG has a beta of 0.73, suggesting that its share price is 27% less volatile than the S&P 500. Comparatively, Innocoll Holdings PLC has a beta of -0.3, suggesting that its share price is 130% less volatile than the S&P 500.

Insider and Institutional Ownership

11.0% of Novartis AG shares are owned by institutional investors. Comparatively, 34.2% of Innocoll Holdings PLC shares are owned by institutional investors. 0.0% of Novartis AG shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Novartis AG and Innocoll Holdings PLC’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Novartis AG $49.18 billion 3.98 $14.46 billion $2.74 30.52
Innocoll Holdings PLC N/A N/A N/A ($1.67) -1.41

Novartis AG has higher revenue and earnings than Innocoll Holdings PLC. Innocoll Holdings PLC is trading at a lower price-to-earnings ratio than Novartis AG, indicating that it is currently the more affordable of the two stocks.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Novartis AG and Innocoll Holdings PLC, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Novartis AG 2 7 6 0 2.27
Innocoll Holdings PLC 0 3 1 0 2.25

Novartis AG presently has a consensus price target of $84.44, suggesting a potential upside of 0.98%. Innocoll Holdings PLC has a consensus price target of $4.50, suggesting a potential upside of 91.49%. Given Innocoll Holdings PLC’s higher possible upside, analysts clearly believe Innocoll Holdings PLC is more favorable than Novartis AG.

Summary

Novartis AG beats Innocoll Holdings PLC on 10 of the 13 factors compared between the two stocks.

Novartis AG Company Profile

Novartis AG is a holding company, which provides healthcare solutions. The Company is engaged in the research, development, manufacturing and marketing of a range of healthcare products led by pharmaceuticals. The Company’s segments include Innovative Medicines, Sandoz, Alcon and Corporate activities. Innovative Medicines researches, develops, manufactures, distributes and sells patented prescription medicines to develop health outcomes for patients and healthcare providers. Sandoz develops, manufactures, distributes and sells prescription medicines, as well as pharmaceutical active substances that are not protected by valid and enforceable third-party patents. Alcon researches, develops, manufactures, distributes and sells eye care products. Alcon is a provider of eye care with product offerings in eye care devices and vision care. The Company’s range of products includes pharmaceuticals and oncology medicines, generic and biosimilar medicines, and eye care devices.

Innocoll Holdings PLC Company Profile

Innocoll Holdings Public Limited Company is a commercial-stage specialty pharmaceutical and medical device company with late-stage development programs. The Company operates through the segment of manufacture and sale of collagen-based pharmaceutical products. It utilizes collagen-based technology platform to develop its biodegradable and bioresorbable products and product candidates, which can be broken down by the body without the need for surgical removal or applied topically. Using its processes at its manufacturing facility, it derives and purifies bovine and equine collagen and then utilizes its technology platform to incorporate the purified collagen into its topical and implantable products. Its lead product candidates are XaraColl for the treatment of post-operative pain and Cogenzia for the treatment of diabetic foot infections. Its marketed products include CollaGUARD, Collatamp, Septocoll and RegenePro. It has initiated its Phase III efficacy trials for Cogenzia.

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