Shire (NASDAQ: SHPG) and Warner Chilcott (NASDAQ:WCRX) are both medical companies, but which is the better investment? We will contrast the two businesses based on the strength of their risk, analyst recommendations, profitability, dividends, valuation, institutional ownership and earnings.

Analyst Recommendations

This is a summary of recent recommendations and price targets for Shire and Warner Chilcott, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Shire 0 5 9 0 2.64
Warner Chilcott 0 0 0 0 N/A

Shire presently has a consensus target price of $212.18, indicating a potential upside of 46.80%.

Insider and Institutional Ownership

20.3% of Shire shares are held by institutional investors. 2.0% of Shire shares are held by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

Dividends

Shire pays an annual dividend of $0.92 per share and has a dividend yield of 0.6%. Warner Chilcott does not pay a dividend. Shire pays out 17.2% of its earnings in the form of a dividend.

Valuation & Earnings

This table compares Shire and Warner Chilcott’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Shire $11.40 billion 3.81 $327.40 million $5.34 27.07
Warner Chilcott N/A N/A N/A N/A N/A

Shire has higher revenue and earnings than Warner Chilcott.

Profitability

This table compares Shire and Warner Chilcott’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Shire 10.95% 14.41% 6.60%
Warner Chilcott N/A N/A N/A

Summary

Shire beats Warner Chilcott on 8 of the 9 factors compared between the two stocks.

Shire Company Profile

Shire plc is a biotech company focused on serving people with rare diseases and other specialized conditions. The Company’s segment is engaged in research, development, licensing, manufacturing, marketing, distribution and sale of specialist medicines. It focuses its development resources on projects in various therapeutic areas (TAs), including Neuroscience, Ophthalmology, Hematology, Oncology, Immunology, Gastrointestinal (GI)/Metabolic/Endocrinology Diseases. Its Hematology products include ADVATE (Antihemophilic Factor (Recombinant)), ADYNOVATE/ADYNOVI (Antihemophilic Factor (Recombinant), PEGylated)), RIXUBIS (Coagulation Factor IX (Recombinant)), VONVENDI (von Willebrand factor (Recombinant)) and FEIBA (Anti-Inhibitor Coagulant Complex). Its Genetic Diseases products include CINRYZE (C1 esterase inhibitor (human)), FIRAZYR (icatibant), ELAPRASE (idursulfase), REPLAGAL (agalsidase alfa) and VPRIV (velaglucerase alfa).

Warner Chilcott Company Profile

Warner Chilcott Public Limited Company is a specialty pharmaceutical company. The Company is focused on the women’s healthcare, gastroenterology, dermatology and urology segments of the branded pharmaceuticals market, primarily in North America. The Company’s hormonal contraceptive product offerings include LOESTRIN 24 FE (norethindrone acetate and ethinyl estradiol tablets, USP and ferrous fumarate tablets), the branded product in the United States hormonal contraception market, and LO LOESTRIN FE (norethindrone acetate and ethinyl estradiol tablets, ethinyl estradiol tablets and ferrous fumarate tablets), its new oral contraceptive product, launched in January 2011, that offers women the lowest dosage of estrogen of any oral contraceptive available in the United States market. In October 2013, Actavis Inc acquired the entire share capital of Warner Chilcott PLC.

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