Analyzing Opko Health (OPK) & Merck & (MRK)
Opko Health (NASDAQ: OPK) and Merck & (NYSE:MRK) are both mid-cap medical companies, but which is the better stock? We will contrast the two businesses based on the strength of their earnings, valuation, dividends, risk, profitability, analyst recommendations and institutional ownership.
Volatility & Risk
Opko Health has a beta of 1.85, meaning that its share price is 85% more volatile than the S&P 500. Comparatively, Merck & has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500.
This table compares Opko Health and Merck &’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
Institutional and Insider Ownership
22.5% of Opko Health shares are owned by institutional investors. Comparatively, 72.9% of Merck & shares are owned by institutional investors. 40.2% of Opko Health shares are owned by insiders. Comparatively, 0.1% of Merck & shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.
Earnings & Valuation
This table compares Opko Health and Merck &’s revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|Opko Health||$1.18 billion||3.07||-$17.02 million||($0.17)||-38.12|
|Merck &||$40.02 billion||4.48||$15.45 billion||$2.47||26.64|
Merck & has higher revenue and earnings than Opko Health. Opko Health is trading at a lower price-to-earnings ratio than Merck &, indicating that it is currently the more affordable of the two stocks.
This is a summary of recent ratings and recommmendations for Opko Health and Merck &, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
Opko Health currently has a consensus price target of $15.25, indicating a potential upside of 135.34%. Merck & has a consensus price target of $69.64, indicating a potential upside of 5.86%. Given Opko Health’s stronger consensus rating and higher probable upside, analysts plainly believe Opko Health is more favorable than Merck &.
Merck & pays an annual dividend of $1.88 per share and has a dividend yield of 2.9%. Opko Health 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. Opko Health has increased its dividend for 5 consecutive years.
Merck & beats Opko Health on 10 of the 16 factors compared between the two stocks.
About Opko Health
OPKO Health, Inc. is a healthcare company. Its segments include Pharmaceutical, Diagnostics and Corporate. Pharmaceutical consists of the pharmaceutical operations in Chile, Mexico, Ireland, Israel and Spain and its pharmaceutical research and development operations. Diagnostics consists of the clinical laboratory operations in Bio-Reference Laboratories (Bio-Reference) and its point-of-care operations. Through Bio-Reference, it operates laboratory divisions, such as Bio-Reference, GenPath (Oncology), GenPath (Women’s Health), GeneDx and Laboratorio Bueno Salud. As of December 31, 2016, it had one commercial stage pharmaceutical product and several pharmaceutical compounds and technologies in various stages of research and development for a range of indications and conditions, including Renal Products, Biologics, hGH-CTP, Factor VII, Oxyntomodulin, active pharmaceutical ingredients, Oligonucleotide Therapeutics, NK-1 Program, Asthma and chronic obstructive pulmonary disease.
About Merck &
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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