Financial Analysis: Pfizer (NYSE:PFE) versus Novo Nordisk A/S (NYSE:NVO)

Pfizer (NYSE:PFE) and Novo Nordisk A/S (NYSE:NVO) are both large-cap medical companies, but which is the superior business? We will compare the two companies based on the strength of their dividends, earnings, risk, profitability, analyst recommendations, institutional ownership and valuation.

Valuation and Earnings

This table compares Pfizer and Novo Nordisk A/S”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pfizer	$63.63 billion	2.17	$8.03 billion	$1.38	17.58
Novo Nordisk A/S	$42.12 billion	6.89	$14.64 billion	$3.38	19.22

Novo Nordisk A/S has lower revenue, but higher earnings than Pfizer. Pfizer 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.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Pfizer and Novo Nordisk A/S, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pfizer	1	13	5	3	2.45
Novo Nordisk A/S	2	5	3	1	2.27

Pfizer presently has a consensus price target of $28.55, suggesting a potential upside of 17.66%. Novo Nordisk A/S has a consensus price target of $112.00, suggesting a potential upside of 72.41%. Given Novo Nordisk A/S’s higher possible upside, analysts plainly believe Novo Nordisk A/S is more favorable than Pfizer.

Dividends

Pfizer pays an annual dividend of $1.72 per share and has a dividend yield of 7.1%. Novo Nordisk A/S pays an annual dividend of $1.64 per share and has a dividend yield of 2.5%. Pfizer pays out 124.6% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Novo Nordisk A/S pays out 48.5% of its earnings in the form of a dividend. Pfizer has increased its dividend for 16 consecutive years. Pfizer is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Pfizer	12.62%	20.33%	8.53%
Novo Nordisk A/S	34.52%	80.94%	24.23%

Volatility and Risk

Pfizer has a beta of 0.58, suggesting that its share price is 42% less volatile than the S&P 500. Comparatively, Novo Nordisk A/S has a beta of 0.64, suggesting that its share price is 36% less volatile than the S&P 500.

Institutional & Insider Ownership

68.4% of Pfizer shares are owned by institutional investors. Comparatively, 11.5% of Novo Nordisk A/S shares are owned by institutional investors. 0.1% of Pfizer shares are owned by company insiders. Comparatively, 0.1% of Novo Nordisk A/S shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Novo Nordisk A/S beats Pfizer on 11 of the 18 factors compared between the two stocks.

About Pfizer

Pfizer Inc. discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products in the United States, Europe, and internationally. The company offers medicines and vaccines in various therapeutic areas, including cardiovascular metabolic, migraine, and women's health under the Eliquis, Nurtec ODT/Vydura, Zavzpret, and the Premarin family brands; infectious diseases with unmet medical needs under the Prevnar family, Abrysvo, Nimenrix, FSME/IMMUN-TicoVac, and Trumenba brands; and COVID-19 prevention and treatment, and potential future mRNA and antiviral products under the Comirnaty and Paxlovid brands. It also provides medicines and vaccines in various therapeutic areas, such as biosimilars for chronic immune and inflammatory diseases under the Xeljanz, Enbrel, Inflectra, Litfulo, Velsipity, and Cibinqo brands; amyloidosis, hemophilia, endocrine diseases, and sickle cell disease under the Vyndaqel family, Oxbryta, BeneFIX, Somavert, Ngenla, and Genotropin brands; sterile injectable and anti-infective medicines under the Sulperazon, Medrol, Zavicefta, Zithromax, and Panzyga brands; and biologics, small molecules, immunotherapies, and biosimilars under the Ibrance, Xtandi, Inlyta, Bosulif, Mektovi, Padcev, Adcetris, Talzenna, Tukysa, Elrexfio, Tivdak, Lorbrena, and Braftovi brands. In addition, the company involved in the contract manufacturing business. It serves wholesalers, retailers, hospitals, clinics, government agencies, pharmacies, individual provider offices, retail pharmacies, and integrated delivery systems. The company has collaboration agreements with Bristol-Myers Squibb Company; Astellas Pharma US, Inc.; Merck KGaA; and BioNTech SE. Pfizer Inc. was founded in 1849 and is headquartered in New York, New York.

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.