Novartis AG (NYSE: NVS) is one of 115 public companies in the “Pharmaceuticals” industry, but how does it compare to its peers? We will compare Novartis AG to similar businesses based on the strength of its institutional ownership, risk, earnings, valuation, dividends, analyst recommendations and profitability.

Volatility & Risk

Novartis AG has a beta of 0.72, suggesting that its stock price is 28% less volatile than the S&P 500. Comparatively, Novartis AG’s peers have a beta of 31.77, suggesting that their average stock price is 3,077% more volatile than the S&P 500.

Dividends

Novartis AG pays an annual dividend of $2.30 per share and has a dividend yield of 2.8%. Novartis AG pays out 81.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Pharmaceuticals” companies pay a dividend yield of 2.6% and pay out 67.1% of their earnings in the form of a dividend.

Analyst Ratings

This is a breakdown of current ratings for Novartis AG and its peers, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Novartis AG 3 6 4 0 2.08
Novartis AG Competitors 851 3764 6742 186 2.54

Novartis AG presently has a consensus price target of $84.41, indicating a potential upside of 2.46%. As a group, “Pharmaceuticals” companies have a potential upside of 25.98%. Given Novartis AG’s peers stronger consensus rating and higher probable upside, analysts clearly believe Novartis AG has less favorable growth aspects than its peers.

Earnings and Valuation

This table compares Novartis AG and its peers gross revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Novartis AG $48.52 billion $6.71 billion 29.32
Novartis AG Competitors $8.27 billion $1.10 billion 128.59

Novartis AG has higher revenue and earnings than its peers. Novartis AG is trading at a lower price-to-earnings ratio than its peers, indicating that it is currently more affordable than other companies in its industry.

Institutional and Insider Ownership

10.9% of Novartis AG shares are held by institutional investors. Comparatively, 42.0% of shares of all “Pharmaceuticals” companies are held by institutional investors. 0.0% of Novartis AG shares are held by company insiders. Comparatively, 12.2% of shares of all “Pharmaceuticals” companies are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock is poised for long-term growth.

Profitability

This table compares Novartis AG and its peers’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Novartis AG 13.73% 15.77% 8.46%
Novartis AG Competitors -2,421.97% -61.18% -8.76%

Summary

Novartis AG peers beat Novartis AG on 9 of the 15 factors compared.

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.

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