Analyzing Bayer Aktiengesellschaft (OTCMKTS:BAYRY) & Johnson & Johnson (NYSE:JNJ)

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

Profitability

This table compares Johnson & Johnson and Bayer Aktiengesellschaft’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Johnson & Johnson	25.00%	32.49%	13.00%
Bayer Aktiengesellschaft	-7.61%	15.48%	4.51%

Analyst Ratings

This is a summary of recent ratings and recommmendations for Johnson & Johnson and Bayer Aktiengesellschaft, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Johnson & Johnson	0	9	9	2	2.65
Bayer Aktiengesellschaft	0	1	1	2	3.25

Johnson & Johnson currently has a consensus price target of $174.50, indicating a potential downside of 1.28%. Given Johnson & Johnson’s higher possible upside, research analysts plainly believe Johnson & Johnson is more favorable than Bayer Aktiengesellschaft.

Dividends

Johnson & Johnson pays an annual dividend of $5.20 per share and has a dividend yield of 2.9%. Bayer Aktiengesellschaft pays an annual dividend of $0.02 per share and has a dividend yield of 0.3%. Johnson & Johnson pays out 55.6% of its earnings in the form of a dividend. Bayer Aktiengesellschaft pays out -2.1% 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. Johnson & Johnson has raised its dividend for 64 consecutive years. Johnson & Johnson is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Johnson & Johnson and Bayer Aktiengesellschaft”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Johnson & Johnson	$90.63 billion	4.70	$14.07 billion	$9.35	18.90
Bayer Aktiengesellschaft	$50.44 billion	0.62	-$2.76 billion	($0.97)	-8.14

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

Insider and Institutional Ownership

69.6% of Johnson & Johnson shares are owned by institutional investors. 0.2% of Johnson & Johnson shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Risk & Volatility

Johnson & Johnson has a beta of 0.41, meaning that its share price is 59% less volatile than the S&P 500. Comparatively, Bayer Aktiengesellschaft has a beta of 0.91, meaning that its share price is 9% less volatile than the S&P 500.

Summary

Johnson & Johnson beats Bayer Aktiengesellschaft on 14 of the 17 factors compared between the two stocks.

About Johnson & Johnson

Johnson & Johnson is a holding company, which engages in the research, development, manufacture, and sale of products in the healthcare field. It operates through the Innovative Medicine and MedTech segments. The Innovative Medicine segment focuses on immunology, infectious diseases, neuroscience, oncology, cardiovascular and metabolism, and pulmonary hypertension. The MedTech segment includes a portfolio of products used in the interventional solutions, orthopaedics, surgery, and vision categories. The company was founded by Robert Wood Johnson I, James Wood Johnson, and Edward Mead Johnson Sr. in 1887 and is headquartered in New Brunswick, NJ.

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.