Organogenesis (NASDAQ:ORGO) versus Merck KGaA (OTCMKTS:MKKGY) Critical Survey

Merck KGaA (OTCMKTS:MKKGY) and Organogenesis (NASDAQ:ORGO) are both medical companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, analyst recommendations, institutional ownership, risk, valuation, dividends and profitability.

Insider and Institutional Ownership

0.1% of Merck KGaA shares are held by institutional investors. Comparatively, 49.6% of Organogenesis shares are held by institutional investors. 33.0% of Organogenesis shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Merck KGaA and Organogenesis’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Merck KGaA	13.49%	9.78%	5.75%
Organogenesis	-1.92%	-0.37%	-0.20%

Volatility & Risk

Merck KGaA has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500. Comparatively, Organogenesis has a beta of 1.75, suggesting that its stock price is 75% more volatile than the S&P 500.

Valuation & Earnings

This table compares Merck KGaA and Organogenesis”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Merck KGaA	$22.57 billion	0.73	$3.00 billion	$2.38	10.69
Organogenesis	$482.04 million	1.21	$860,000.00	($0.14)	-32.71

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

Analyst Ratings

This is a summary of recent recommendations for Merck KGaA and Organogenesis, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Merck KGaA	0	2	0	0	2.00
Organogenesis	0	1	2	0	2.67

Organogenesis has a consensus price target of $7.50, indicating a potential upside of 63.76%. Given Organogenesis’ stronger consensus rating and higher probable upside, analysts plainly believe Organogenesis is more favorable than Merck KGaA.

About Merck KGaA

Merck KGaA operates as a science and technology company in Germany. It operates through Life Science, Healthcare, and Electronics segments. The company’s Life Science segment offers tools, chemicals, and equipment for academic labs, biotech, and pharmaceutical manufacturers, as well as industrial sector. This segment provides drug manufacturers with process development expertise and technologies, such as continuous bioprocessing; testing kits and services; reagents and services; testing solutions that analyze air, water, and soil; and testing and tools, as well as products that help test nutritional value and identify quality inconsistencies. Its Healthcare segment discovers, develops, manufacturers, and markets prescription drugs and biopharmaceuticals for the treatment of oncology, neurology and immunology, fertility, endocrinology, as well as cardiovascular, diabetes, thyroid disorders, and multiple sclerosis; general medicines; and injection device and disease monitoring software. The Electronics segment supplies materials for the semiconductor and display industries and surface design, such as delivery systems and services, as well as surface solutions, including cosmetics, effect pigments, and functional solutions. In addition, it has in-licensing agreement with Debiopharm International SA for developing and commercializing drug candidates for the treatment of head and neck cancer; Jiangsu Hengrui Pharmaceuticals Co. Ltd. for developing, manufacturing, and commercializing drug candidates for the treatment of metastatic colorectal cancer; and Abbisko Therapeutics Co. Ltd. for developing and commercializing of drug candidates for the treatment of tenosynovial giant cell tumor, as well as license and collaboration agreement with Merck KGaA to discover two targeted protein degraders against critical oncogenic proteins. The company was founded in 1668 and is headquartered in Darmstadt, Germany. Merck KGaA operates as a subsidiary of E. Merck KGaA.

About Organogenesis

Organogenesis Holdings Inc., a regenerative medicine company, develops, manufactures, and commercializes solutions for the advanced wound care, and surgical and sports medicine markets in the United States. The company's advanced wound care products include Affinity, an amniotic membrane in which viable cells, growth factors/cytokines, and ECM proteins in the native tissue are preserved; Novachor, a chorion membrane in which viable cells, growth factors/cytokines, and ECM proteins in the native tissue are preserved; Apligraf, a bioengineered living cell therapy that produce spectrum of cytokines and growth factors; Dermagraft, a bioengineered product that produces human collagen, ECM, proteins, cytokines, and growth factors; NuShield, dehydrated placental tissue covering amnion and chorion membranes for spongy/intermediate layer intact; and PuraPly AM, an antimicrobial barrier that enables conformability and fluid drainage. Its products also include FortiShield, a biosynthetic wound matrix for use as a temporary protective covering; PuraPly MZ, a micronized particulate version of PuraPly for the management of open wounds in the surgical setting; and CYGNUS Dual, a dehydrated placental tissue preserved to retain the ECM scaffold. The company's pipeline products include ReNu, a cryopreserved suspension used to support healing of soft tissues; PuraForce, a bioengineered porcine collagen surgical matrix for use in soft tissue reinforcement applications; and TransCyte, a bioengineered tissue for the treatment of partial thickness burns. It serves hospitals, wound care centers, government facilities, ambulatory service centers, and physician office through direct sales representives and independent agencies. Organogenesis Holdings Inc. was founded in 1985 and is headquartered in Canton, Massachusetts.