Head-To-Head Analysis: Bayer Aktiengesellschaft (OTCMKTS:BAYRY) and Eli Lilly and Company (NYSE:LLY)

Bayer Aktiengesellschaft (OTCMKTS:BAYRY) and Eli Lilly and Company (NYSE:LLY) are both large-cap medical companies, but which is the better business? We will compare the two businesses based on the strength of their analyst recommendations, profitability, dividends, earnings, valuation, institutional ownership and risk.

Institutional and Insider Ownership

82.5% of Eli Lilly and Company shares are owned by institutional investors. 0.1% of Eli Lilly and Company shares are owned by company 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.

Profitability

This table compares Bayer Aktiengesellschaft and Eli Lilly and Company’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bayer Aktiengesellschaft	-7.26%	13.94%	4.09%
Eli Lilly and Company	22.67%	85.51%	15.74%

Dividends

Bayer Aktiengesellschaft pays an annual dividend of $0.02 per share and has a dividend yield of 0.3%. Eli Lilly and Company pays an annual dividend of $6.00 per share and has a dividend yield of 0.8%. Bayer Aktiengesellschaft pays out -2.2% of its earnings in the form of a dividend. Eli Lilly and Company pays out 48.8% 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. Eli Lilly and Company has raised its dividend for 11 consecutive years. Eli Lilly and Company is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Bayer Aktiengesellschaft and Eli Lilly and Company”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bayer Aktiengesellschaft	$50.44 billion	0.60	-$2.76 billion	($0.92)	-8.35
Eli Lilly and Company	$45.04 billion	16.06	$10.59 billion	$12.29	62.12

Eli Lilly and Company has lower revenue, but higher earnings than Bayer Aktiengesellschaft. Bayer Aktiengesellschaft is trading at a lower price-to-earnings ratio than Eli Lilly and Company, indicating that it is currently the more affordable of the two stocks.

Analyst Ratings

This is a summary of recent ratings and recommmendations for Bayer Aktiengesellschaft and Eli Lilly and Company, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bayer Aktiengesellschaft	0	1	1	2	3.25
Eli Lilly and Company	1	3	17	0	2.76

Eli Lilly and Company has a consensus price target of $1,011.79, indicating a potential upside of 32.53%. Given Eli Lilly and Company’s higher possible upside, analysts plainly believe Eli Lilly and Company is more favorable than Bayer Aktiengesellschaft.

Risk and Volatility

Bayer Aktiengesellschaft has a beta of 0.85, suggesting that its share price is 15% less volatile than the S&P 500. Comparatively, Eli Lilly and Company has a beta of 0.4, suggesting that its share price is 60% less volatile than the S&P 500.

Summary

Eli Lilly and Company beats Bayer Aktiengesellschaft on 13 of the 18 factors compared between the two stocks.

About Bayer Aktiengesellschaft

Bayer Aktiengesellschaft, together its subsidiaries, operates as a life science company worldwide. It operates through Pharmaceuticals, Consumer Health, and Crop Science segments. The Pharmaceuticals segment offers prescription products primarily for cardiology and women’s health care; specialty therapeutics in the areas of oncology, hematology, and ophthalmology; and diagnostic imaging equipment and digital solutions, and contrast agents, as well as cell and gene therapy. The Consumer Health segment markets nonprescription over-the-counter medicines for self-medication and self-care; and solutions for nutritional supplements, allergy, cough and cold, dermatology, pain and cardiovascular risk prevention, and digestive health. This segment also provides breeding, propagation, and production/processing of seeds, including seed dressing. The company has a collaboration with Acuitas Therapeutics, Inc. to strengthen gene editing programs; Peking University in the area of basic pharmaceutical research; the Swiss Tropical and Public Health Institute in the development of the compound emodepside for the treatment of infection with soil-transmitted helminths; bit.bio Ltd. for the discovery and manufacture of regulatory T cells for use in creating therapeutics; Hologic, Inc. in the field of contrastenhanced-mammography solutions to improve diagnostic imaging for the detection of breast cancer; and Twist Bioscience Corporation centering around the research and development of antibody-based pharmaceuticals, as well as with CrossBay Medical Inc. It distributes its products through wholesalers, pharmacies and pharmacy chains, supermarkets, online and other retailers, and hospitals, as well as directly to farmers. The company has collaboration with Thermo Fisher Scientific. Bayer Aktiengesellschaft was founded in 1863 and is based in Leverkusen, Germany.

About Eli Lilly and Company

Eli Lilly and Company discovers, develops, and markets human pharmaceuticals worldwide. The company offers Basaglar, Humalog, Humalog Mix 75/25, Humalog U-100, Humalog U-200, Humalog Mix 50/50, insulin lispro, insulin lispro protamine, insulin lispro mix 75/25, Humulin, Humulin 70/30, Humulin N, Humulin R, and Humulin U-500 for diabetes; Jardiance, Mounjaro, and Trulicity for type 2 diabetes; and Zepbound for obesity. It also provides oncology products, including Alimta, Cyramza, Erbitux, Jaypirca, Retevmo, Tyvyt, and Verzenio. In addition, the company offers Olumiant for rheumatoid arthritis, atopic dermatitis, severe alopecia areata, and COVID-19; Taltz for plaque psoriasis, psoriatic arthritis, ankylosing spondylitis, and non-radiographic axial spondylarthritis; Omvoh for ulcerative colitis; Cymbalta for depressive disorder, diabetic peripheral neuropathic pain, generalized anxiety disorder, fibromyalgia, and chronic musculoskeletal pain; Ebglyss for severe atopic dermatitis; and Emgality for migraine prevention and episodic cluster headache. Further, it provides Cialis for erectile dysfunction and benign prostatic hyperplasia; and Forteo for osteoporosis. It has collaborations with Incyte Corporation; Boehringer Ingelheim Pharmaceuticals, Inc.; F. Hoffmann-La Roche Ltd and Genentech, Inc.; Biologics, Inc., AbCellera Biologics Inc.; and Chugai Pharmaceutical Co., Ltd. The company was founded in 1876 and is headquartered in Indianapolis, Indiana.