Novo Nordisk A/S (NYSE:NVO) vs. Bayer Aktiengesellschaft (OTCMKTS:BAYRY) Critical Contrast

Novo Nordisk A/S (NYSE:NVO) and Bayer Aktiengesellschaft (OTCMKTS:BAYRY) are both large-cap medical companies, but which is the better stock? We will contrast the two companies based on the strength of their institutional ownership, dividends, profitability, analyst recommendations, earnings, valuation and risk.

Institutional & Insider Ownership

11.5% of Novo Nordisk A/S shares are held by institutional investors. 0.1% of Novo Nordisk A/S shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares Novo Nordisk A/S and Bayer Aktiengesellschaft’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Novo Nordisk A/S	34.52%	80.94%	24.23%
Bayer Aktiengesellschaft	-7.26%	13.94%	4.09%

Earnings and Valuation

This table compares Novo Nordisk A/S and Bayer Aktiengesellschaft”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Novo Nordisk A/S	$42.12 billion	7.32	$14.64 billion	$3.38	20.43
Bayer Aktiengesellschaft	$50.44 billion	0.60	-$2.76 billion	($0.92)	-8.34

Novo Nordisk A/S has higher earnings, but lower revenue than Bayer Aktiengesellschaft. Bayer Aktiengesellschaft is trading at a lower price-to-earnings ratio than Novo Nordisk A/S, indicating that it is currently the more affordable of the two stocks.

Dividends

Novo Nordisk A/S pays an annual dividend of $1.64 per share and has a dividend yield of 2.4%. Bayer Aktiengesellschaft pays an annual dividend of $0.02 per share and has a dividend yield of 0.3%. Novo Nordisk A/S pays out 48.5% of its earnings in the form of a dividend. Bayer Aktiengesellschaft pays out -2.2% 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.

Risk & Volatility

Novo Nordisk A/S has a beta of 0.64, indicating that its stock price is 36% less volatile than the S&P 500. Comparatively, Bayer Aktiengesellschaft has a beta of 0.86, indicating that its stock price is 14% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and price targets for Novo Nordisk A/S and Bayer Aktiengesellschaft, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Novo Nordisk A/S	2	5	3	1	2.27
Bayer Aktiengesellschaft	0	1	1	2	3.25

Novo Nordisk A/S presently has a consensus price target of $112.00, indicating a potential upside of 62.20%. Given Novo Nordisk A/S’s higher probable upside, equities analysts clearly believe Novo Nordisk A/S is more favorable than Bayer Aktiengesellschaft.

Summary

Novo Nordisk A/S beats Bayer Aktiengesellschaft on 12 of the 17 factors compared between the two stocks.

About Novo Nordisk A/S

Novo Nordisk A/S, together with its subsidiaries, engages in the research and development, manufacture, and distribution of pharmaceutical products in Europe, the Middle East, Africa, Mainland China, Hong Kong, Taiwan, North America, and internationally. It operates in two segments, Diabetes and Obesity Care, and Rare Disease. The Diabetes and Obesity care segment provides products for diabetes, obesity, cardiovascular, and other emerging therapy areas. The Rare Disease segment offers products in the areas of rare blood disorders, rare endocrine disorders, and hormone replacement therapy. The company also provides insulin pens, growth hormone pens, and injection needles. In addition, it offers smart solutions for diabetes treatment, such as smart insulin pens and Dose Check, an insulin dose guidance application. The company has a collaboration agreement with Aspen Pharmaceuticals to produce insulin products; and with Korro Bio, Inc. for the discovery and development of new genetic medicines to treat cardiometabolic diseases. Novo Nordisk A/S was founded in 1923 and is headquartered in Bagsvaerd, Denmark.

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.