Head-To-Head Analysis: Sinopharm Group (OTCMKTS:SHTDF) & McKesson (NYSE:MCK)

Sinopharm Group (OTCMKTS:SHTDF) and McKesson (NYSE:MCK) are both medical companies, but which is the better business? We will contrast the two companies based on the strength of their earnings, risk, analyst recommendations, dividends, institutional ownership, valuation and profitability.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Sinopharm Group and McKesson, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Sinopharm Group	0	0	0	0	N/A
McKesson	0	2	7	0	2.78

McKesson has a consensus price target of $452.33, indicating a potential upside of 11.04%. Given McKesson’s higher possible upside, analysts clearly believe McKesson is more favorable than Sinopharm Group.

Institutional and Insider Ownership

16.5% of Sinopharm Group shares are owned by institutional investors. Comparatively, 82.7% of McKesson shares are owned by institutional investors. 0.2% of McKesson shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

Profitability

This table compares Sinopharm Group and McKesson’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Sinopharm Group	N/A	N/A	N/A
McKesson	1.32%	-252.54%	6.08%

Valuation & Earnings

This table compares Sinopharm Group and McKesson’s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Sinopharm Group	N/A	N/A	N/A	$1.00	2.83
McKesson	$276.71 billion	0.20	$3.56 billion	$26.81	15.19

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

Dividends

Sinopharm Group pays an annual dividend of $0.26 per share and has a dividend yield of 9.2%. McKesson pays an annual dividend of $2.48 per share and has a dividend yield of 0.6%. Sinopharm Group pays out 26.1% of its earnings in the form of a dividend. McKesson pays out 9.3% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. McKesson has increased its dividend for 16 consecutive years.

Summary

McKesson beats Sinopharm Group on 11 of the 13 factors compared between the two stocks.

About Sinopharm Group

Sinopharm Group Co. Ltd., together with its subsidiaries, engages in the wholesale and retail of pharmaceutical and medical devices and healthcare products in the People's Republic of China. The company operates through four segments: Pharmaceutical Distribution, Medical Devices, Retail Pharmacy, and Other Business. The Pharmaceutical Distribution segment distributes pharmaceutical products to hospitals, other distributors, retail pharmacy stores, and clinics. This segment also offers distribution, logistics, and other value-added services for domestic and international pharmaceutical and healthcare products manufacturers, and other suppliers. The Medical Devices segment distributes medical devices. The Retail Pharmacy segment operates and franchises a network of retail drug stores. The Other Business segment engages in the production and sale of pharmaceutical products, chemical reagents, and laboratory supplies. The company also rents and manages properties; distributes medical instruments, Chinese herbal medicines, antibiotics, and biological products; and offers information technology development and medicine consultation, investment, goods and technology import and export, business consultation, health consultation, medical consulting, market information consulting and investigation, and convention and exhibition services. In addition, it manages medical project investment, consulting, and technology training activities. The company was founded in 2003 and is headquartered in Shanghai, the People's Republic of China. Sinopharm Group Co. Ltd. is a subsidiary of Sinopharm Industrial Investment Co., Ltd.

About McKesson

McKesson Corporation provides healthcare services in the United States and internationally. It operates through four segments: U.S. Pharmaceutical, Prescription Technology Solutions (RxTS), Medical-Surgical Solutions, and International. The U.S. Pharmaceutical segment distributes branded, generic, specialty, biosimilar and over-the-counter pharmaceutical drugs, and other healthcare-related products. This segment also provides practice management, technology, clinical support, and business solutions to community-based oncology and other specialty practices; and consulting, outsourcing, technological, and other services, as well as sells financial, operational, and clinical solutions to pharmacies. The RxTS segment serves biopharma and life sciences partners and patients to address medication challenges for patients by working across healthcare; connects patients, pharmacies, providers, pharmacy benefit managers, health plans, and biopharma companies to deliver innovative solutions to help people get the medicine needed to live healthier lives; and provides prescription price transparency, benefit insight, dispensing support, third-party logistics, and wholesale distribution support services. The Medical-Surgical Solutions segment provides medical-surgical supply distribution, logistics, and other services to healthcare providers, including physician offices, surgery centers, nursing homes, hospital reference labs, and home health care agencies. The International segment offers distribution and services to wholesale, institutional, and retail customers in Europe and Canada. McKesson Corporation was founded in 1833 and is headquartered in Irving, Texas.