Johnson & Johnson (NYSE: JNJ) 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 valuation, profitability, earnings, risk, analyst recommendations, institutional ownership and dividends.
Institutional and Insider Ownership
65.9% of Johnson & Johnson shares are owned by institutional investors. Comparatively, 74.5% of Innoviva shares are owned by institutional investors. 0.2% of Johnson & Johnson shares are owned by company insiders. Comparatively, 1.6% of Innoviva shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.
This is a summary of current ratings and target prices for Johnson & Johnson and Innoviva, as reported by MarketBeat.com.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Johnson & Johnson||4||4||10||0||2.33|
Johnson & Johnson presently has a consensus price target of $144.59, indicating a potential upside of 2.44%. Innoviva has a consensus price target of $13.00, indicating a potential downside of 1.81%. Given Johnson & Johnson’s stronger consensus rating and higher probable upside, research analysts clearly believe Johnson & Johnson is more favorable than Innoviva.
Johnson & Johnson pays an annual dividend of $3.36 per share and has a dividend yield of 2.4%. Innoviva does not pay a dividend. Johnson & Johnson pays out 58.3% of its earnings in the form of a dividend. Innoviva has raised its dividend for 54 consecutive years.
This table compares Johnson & Johnson and Innoviva’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Johnson & Johnson||21.28%||27.38%||13.20%|
Risk & Volatility
Johnson & Johnson has a beta of 0.8, suggesting that its stock price is 20% less volatile than the S&P 500. Comparatively, Innoviva has a beta of 2.52, suggesting that its stock price is 152% more volatile than the S&P 500.
Earnings & Valuation
This table compares Johnson & Johnson and Innoviva’s top-line revenue, earnings per share and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Johnson & Johnson||$71.89 billion||5.27||$16.54 billion||$5.76||24.50|
|Innoviva||$133.57 million||10.71||$59.53 million||$0.87||15.22|
Johnson & Johnson has higher revenue and earnings than Innoviva. Innoviva is trading at a lower price-to-earnings ratio than Johnson & Johnson, indicating that it is currently the more affordable of the two stocks.
Johnson & Johnson beats Innoviva on 9 of the 17 factors compared between the two stocks.
About Johnson & Johnson
Johnson & Johnson is a holding company, which is engaged in the research and development, manufacture and sale of a range of products in the healthcare field. It operates through three segments: Consumer, Pharmaceutical and Medical Devices. Its primary focus is products related to human health and well-being. The Consumer segment includes a range of products used in the baby care, oral care, skin care, over-the-counter pharmaceutical, women’s health and wound care markets. The Pharmaceutical segment is focused on five therapeutic areas, including immunology, infectious diseases, neuroscience, oncology, and cardiovascular and metabolic diseases. The Medical Devices segment includes a range of products used in the orthopedic, surgery, cardiovascular, diabetes care and vision care fields. Its research facilities are located in the United States, Belgium, Brazil, Canada, China, France, Germany, India, Israel, Japan, the Netherlands, Singapore, Switzerland and the United Kingdom.
Innoviva, Inc., formerly Theravance, Inc., is engaged in the development, commercialization and financial management of bio-pharmaceuticals. It focuses on the respiratory assets partnered with Glaxo Group Limited (GSK), including RELVAR/BREO ELLIPTA (fluticasone furoate (FF)/vilanterol (VI)) and ANORO ELLIPTA (umeclidinium bromide/vilanterol (UMEC/VI)). Under the Long-Acting Beta2 Agonist (LABA) Collaboration Agreement and the Strategic Alliance Agreement with GSK, the Company is eligible to receive the annual royalties from GSK on sales of RELVAR/BREO ELLIPTA. For other products combined with a LABA from the LABA collaboration, such as ANORO ELLIPTA, royalties are upward tiering and range from 6.5% to 10%. RELVAR/BREO is a once-a-day combination inhaled respiratory medicine consisting of a LABA (VI) and an inhaled corticosteroid (ICS), FF. ANORO ELLIPTA a once-daily medicine combining a long-acting muscarinic antagonist (LAMA), umeclidinium bromide (UMEC), with a LABA.
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