Critical Review: Johnson & Johnson (NYSE:JNJ) & Oculis (NASDAQ:OCS)

Oculis (NASDAQ:OCS) and Johnson & Johnson (NYSE:JNJ) are both healthcare companies, but which is the superior stock? We will compare the two companies based on the strength of their earnings, valuation, analyst recommendations, risk, dividends, institutional ownership and profitability.

Volatility and Risk

Oculis has a beta of 0.67, indicating that its stock price is 33% less volatile than the S&P 500. Comparatively, Johnson & Johnson has a beta of 0.22, indicating that its stock price is 78% less volatile than the S&P 500.

Analyst Ratings

This is a summary of current ratings and recommmendations for Oculis and Johnson & Johnson, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Oculis	1	0	9	0	2.80
Johnson & Johnson	0	8	17	1	2.73

Oculis currently has a consensus price target of $39.44, suggesting a potential upside of 394.54%. Johnson & Johnson has a consensus price target of $275.92, suggesting a potential upside of 2.76%. Given Oculis’ stronger consensus rating and higher probable upside, equities research analysts plainly believe Oculis is more favorable than Johnson & Johnson.

Valuation and Earnings

This table compares Oculis and Johnson & Johnson”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Oculis	$1.45 million	318.93	-$119.44 million	($1.74)	-4.58
Johnson & Johnson	$94.19 billion	6.86	$26.80 billion	$6.60	40.68

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

Insider and Institutional Ownership

22.3% of Oculis shares are held by institutional investors. Comparatively, 69.6% of Johnson & Johnson shares are held by institutional investors. 0.2% of Johnson & Johnson shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Oculis and Johnson & Johnson’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Oculis	-6,777.18%	-42.61%	-35.23%
Johnson & Johnson	16.20%	31.64%	13.04%

Summary

Johnson & Johnson beats Oculis on 11 of the 15 factors compared between the two stocks.

About Oculis

Oculis Holding AG, a clinical-stage biopharmaceutical company, develops drug candidates to treat ophthalmic diseases. The company's lead product candidate is OCS-01, a topical dexamethasone optireach formulation, which is in Phase 3 clinical trials for the treatment of diabetic macular edema; OCS-02, a topical biologic candidate that is in Phase 2b clinical trials for the treatment for dry eye disease; and OCS-05, a disease modifying neuroprotective agent for neurological damage with indications for glaucoma, dry age-related macular degeneration and diabetic retinopathy, and acute optic neuritis. The company is based in Zug, Switzerland.

About Johnson & Johnson

Johnson & Johnson is a holding company, which engages in the research, development, manufacture, and sale of products in the healthcare field. It operates through the Innovative Medicine and MedTech segments. The Innovative Medicine segment focuses on immunology, infectious diseases, neuroscience, oncology, cardiovascular and metabolism, and pulmonary hypertension. The MedTech segment includes a portfolio of products used in the interventional solutions, orthopaedics, surgery, and vision categories. The company was founded by Robert Wood Johnson I, James Wood Johnson, and Edward Mead Johnson Sr. in 1887 and is headquartered in New Brunswick, NJ.