Aurinia Pharmaceuticals (NASDAQ:AUPH) and Merck KGaA (OTCMKTS:MKKGY) Head-To-Head Analysis

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

Institutional & Insider Ownership

0.1% of Merck KGaA shares are held by institutional investors. Comparatively, 36.8% of Aurinia Pharmaceuticals shares are held by institutional investors. 12.2% of Aurinia Pharmaceuticals shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Analyst Recommendations

This is a summary of current recommendations and price targets for Merck KGaA and Aurinia Pharmaceuticals, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Merck KGaA	0	2	0	0	2.00
Aurinia Pharmaceuticals	0	4	2	0	2.33

Aurinia Pharmaceuticals has a consensus price target of $17.25, indicating a potential upside of 18.72%. Given Aurinia Pharmaceuticals’ stronger consensus rating and higher probable upside, analysts plainly believe Aurinia Pharmaceuticals is more favorable than Merck KGaA.

Valuation and Earnings

This table compares Merck KGaA and Aurinia Pharmaceuticals”s gross 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	0.86	$3.00 billion	$2.51	11.90
Aurinia Pharmaceuticals	$235.13 million	8.15	$5.75 million	$0.56	25.95

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

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Merck KGaA	13.92%	10.07%	5.92%
Aurinia Pharmaceuticals	29.28%	25.19%	17.25%

Volatility and Risk

Merck KGaA has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500. Comparatively, Aurinia Pharmaceuticals has a beta of 1.46, meaning that its stock price is 46% more volatile than the S&P 500.

Summary

Aurinia Pharmaceuticals beats Merck KGaA on 11 of the 14 factors compared between the two stocks.

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 Aurinia Pharmaceuticals

Aurinia Pharmaceuticals Inc., a commercial-stage biopharmaceutical company, focuses on developing and commercializing therapies to treat various diseases with unmet medical need in the United States. It offers LUPKYNIS for the treatment of adult patients with active lupus nephritis. It has a collaboration and license agreement with Otsuka Pharmaceutical Co., Ltd. The company was incorporated in 1993 and is headquartered in Edmonton, Canada.