Pernix Therapeutics Holdings (NASDAQ: PTX) and Merck & (NYSE:MRK) are both medical companies, but which is the superior stock? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, earnings, analyst recommendations, valuation and profitability.

Volatility and Risk

Pernix Therapeutics Holdings has a beta of 1.66, suggesting that its stock price is 66% more volatile than the S&P 500. Comparatively, Merck & has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500.

Dividends

Merck & pays an annual dividend of $1.88 per share and has a dividend yield of 2.9%. Pernix Therapeutics Holdings does not pay a dividend. Merck & pays out 76.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Pernix Therapeutics Holdings has raised its dividend for 5 consecutive years.

Insider & Institutional Ownership

17.8% of Pernix Therapeutics Holdings shares are owned by institutional investors. Comparatively, 73.0% of Merck & shares are owned by institutional investors. 5.6% of Pernix Therapeutics Holdings shares are owned by insiders. Comparatively, 0.1% of Merck & shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Profitability

This table compares Pernix Therapeutics Holdings and Merck &’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Pernix Therapeutics Holdings -120.56% N/A -37.77%
Merck & 17.14% 26.02% 11.15%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Pernix Therapeutics Holdings and Merck &, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Pernix Therapeutics Holdings 0 0 0 0 N/A
Merck & 1 8 10 0 2.47

Merck & has a consensus price target of $69.13, indicating a potential upside of 6.15%. Given Merck &’s higher possible upside, analysts plainly believe Merck & is more favorable than Pernix Therapeutics Holdings.

Valuation & Earnings

This table compares Pernix Therapeutics Holdings and Merck &’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Pernix Therapeutics Holdings $135.70 million 0.23 $8.63 million ($18.19) -0.16
Merck & $40.02 billion 4.44 $15.45 billion $2.47 26.37

Merck & has higher revenue and earnings than Pernix Therapeutics Holdings. Pernix Therapeutics Holdings is trading at a lower price-to-earnings ratio than Merck &, indicating that it is currently the more affordable of the two stocks.

Summary

Merck & beats Pernix Therapeutics Holdings on 11 of the 15 factors compared between the two stocks.

Pernix Therapeutics Holdings Company Profile

Pernix Therapeutics Holdings, Inc. is a specialty pharmaceutical company. The Company focuses on identifying, developing and commercializing differentiated products that address unmet medical needs. It focuses on underserved therapeutic areas, such as central nervous system (CNS), including neurology and psychiatry, as well as other specialty therapeutic areas. Its products include Treximet, indicated for acute migraine; Zohydro ER with BeadTek, an extended-release opioid agonist indicated for the management of pain severe; Silenor for the treatment of insomnia characterized by difficulty with sleep maintenance, and Khedezla for major depressive disorder. It promotes selected non-core branded products, such as its cough and cold products, through co-promotion arrangements with third-party sales organizations, and distributes its generic products through its subsidiaries, Macoven Pharmaceuticals, LLC (Macoven) and Cypress Pharmaceuticals, Inc.

Merck & Company Profile

Merck & Co., Inc. is a global healthcare company. The Company offers health solutions through its prescription medicines, vaccines, biologic therapies and animal health products. It operates through four segments: Pharmaceutical, Animal Health, Healthcare Services and Alliances. The Company’s Pharmaceutical segment includes human health pharmaceutical and vaccine products marketed either directly by the Company or through joint ventures. Human health pharmaceutical products consist of therapeutic and preventive agents, generally sold by prescription, for the treatment of human disorders. The Company sells its human health pharmaceutical products primarily to drug wholesalers and retailers, hospitals, government agencies and managed healthcare providers, such as health maintenance organizations, pharmacy benefit managers and other institutions. Vaccine products consist of preventive pediatric, adolescent and adult vaccines, primarily administered at physician offices.

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