Head-To-Head Analysis: Merck & Co., Inc. (NYSE:MRK) vs. Innoviva (NASDAQ:INVA)

Merck & Co., Inc. (NYSE:MRK) and Innoviva (NASDAQ:INVA) are both medical companies, but which is the better stock? We will compare the two companies based on the strength of their institutional ownership, analyst recommendations, valuation, profitability, dividends, earnings and risk.

Insider and Institutional Ownership

76.1% of Merck & Co., Inc. shares are held by institutional investors. Comparatively, 99.1% of Innoviva shares are held by institutional investors. 0.1% of Merck & Co., Inc. shares are held by company insiders. Comparatively, 2.3% of Innoviva shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Volatility & Risk

Merck & Co., Inc. has a beta of 0.38, indicating that its share price is 62% less volatile than the S&P 500. Comparatively, Innoviva has a beta of 0.37, indicating that its share price is 63% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent recommendations and price targets for Merck & Co., Inc. and Innoviva, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Merck & Co., Inc.	1	12	6	2	2.43
Innoviva	0	0	2	0	3.00

Merck & Co., Inc. currently has a consensus target price of $109.19, suggesting a potential upside of 37.79%. Innoviva has a consensus target price of $55.00, suggesting a potential upside of 161.90%. Given Innoviva’s stronger consensus rating and higher probable upside, analysts clearly believe Innoviva is more favorable than Merck & Co., Inc..

Earnings and Valuation

This table compares Merck & Co., Inc. and Innoviva”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Merck & Co., Inc.	$64.17 billion	3.10	$17.12 billion	$6.87	11.53
Innoviva	$358.71 million	3.68	$23.39 million	($1.01)	-20.79

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

Profitability

This table compares Merck & Co., Inc. and Innoviva’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Merck & Co., Inc.	27.27%	43.23%	17.11%
Innoviva	-16.15%	15.77%	8.41%

Summary

Merck & Co., Inc. beats Innoviva on 10 of the 15 factors compared between the two stocks.

About Merck & Co., Inc.

Merck & Co., Inc. is a health care company, which engages in the provision of health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products. It operates through the following segments: Pharmaceutical, Animal Health, and Other. The Pharmaceutical segment includes human health pharmaceutical and vaccine products. The Animal Health segment discovers, develops, manufactures, and markets animal health products, such as pharmaceutical and vaccine products, for the prevention, treatment and control of disease in livestock, and companion animal species. The Other segment consists of sales for the non-reportable segments of healthcare services. The company was founded in 1891 and is headquartered in Rahway, NJ.

About Innoviva

Innoviva, Inc. engages in the development and commercialization of pharmaceutical products in the United States and internationally. The company’s products include RELVAR/BREO ELLIPTA, a once-daily combination medicine consisting of a LABA, vilanterol (VI), an inhaled corticosteroid (ICS), and fluticasone furoate; ANORO ELLIPTA, a once-daily medicine combining a long-acting muscarinic antagonist (LAMA) and umeclidinium bromide (UMEC) with a LABA, VI; GIAPREZA (angiotensin II), a vasoconstrictor to increase blood pressure in adults with septic or other distributive shock; XERAVA (eravacycline) for the treatment of complicated intra-abdominal infections in adults; and XACDURO, a beta lactamase inhibitor for the treatment of hospital-acquired bacterial pneumonia and ventilator-associated bacterial pneumonia. Its development pipeline includes zoliflodacin, a late-stage product candidate, a potential single oral dose cure for the treatment of uncomplicated gonorrhea. Innoviva, Inc. has a strategic partnership with Sarissa Capital Management LP. It has long-acting beta2 agonist (LABA) collaboration agreement with Glaxo Group Limited to develop and commercialize once-daily products for the treatment of chronic obstructive pulmonary disease and asthma. The company was formerly known as Theravance, Inc. and changed its name to Innoviva, Inc. in January 2016. Innoviva, Inc. was incorporated in 1996 and is headquartered in Burlingame, California.