Critical Comparison: Novartis AG (NVS) & Its Rivals

Novartis AG (NYSE: NVS) is one of 111 public companies in the “Pharmaceuticals” industry, but how does it weigh in compared to its competitors? We will compare Novartis AG to similar businesses based on the strength of its earnings, risk, valuation, institutional ownership, profitability, analyst recommendations and dividends.

Volatility and Risk

Novartis AG has a beta of 0.72, suggesting that its share price is 28% less volatile than the S&P 500. Comparatively, Novartis AG’s competitors have a beta of 33.34, suggesting that their average share price is 3,234% more volatile than the S&P 500.

Earnings & Valuation

This table compares Novartis AG and its competitors revenue, earnings per share and valuation.

Gross Revenue NetIncome Price/Earnings Ratio
Novartis AG $48.52 billion $6.71 billion 29.43
Novartis AG Competitors $8.39 billion $1.12 billion 135.10

Novartis AG has higher revenue and earnings than its competitors. Novartis AG is trading at a lower price-to-earnings ratio than its competitors, indicating that it is currently more affordable than other companies in its industry.

Insider and Institutional Ownership

11.0% of Novartis AG shares are owned by institutional investors. Comparatively, 43.5% of shares of all “Pharmaceuticals” companies are owned by institutional investors. 0.0% of Novartis AG shares are owned by insiders. Comparatively, 11.7% of shares of all “Pharmaceuticals” companies 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.

Profitability

This table compares Novartis AG and its competitors’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Novartis AG 13.73% 15.77% 8.46%
Novartis AG Competitors -2,453.57% -63.07% -9.31%

Dividends

Novartis AG pays an annual dividend of $2.30 per share and has a dividend yield of 2.8%. Novartis AG pays out 81.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. As a group, “Pharmaceuticals” companies pay a dividend yield of 2.6% and pay out 67.0% of their earnings in the form of a dividend.

Analyst Recommendations

This is a breakdown of recent recommendations and price targets for Novartis AG and its competitors, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Novartis AG 3 6 4 0 2.08
Novartis AG Competitors 858 3789 6807 185 2.54

Novartis AG currently has a consensus target price of $84.41, indicating a potential upside of 2.05%. As a group, “Pharmaceuticals” companies have a potential upside of 26.39%. Given Novartis AG’s competitors stronger consensus rating and higher possible upside, analysts clearly believe Novartis AG has less favorable growth aspects than its competitors.

Summary

Novartis AG competitors beat Novartis AG on 9 of the 15 factors compared.

Novartis AG Company Profile

Novartis AG is a holding company, which provides healthcare solutions. The Company is engaged in the research, development, manufacturing and marketing of a range of healthcare products led by pharmaceuticals. The Company’s segments include Innovative Medicines, Sandoz, Alcon and Corporate activities. Innovative Medicines researches, develops, manufactures, distributes and sells patented prescription medicines to develop health outcomes for patients and healthcare providers. Sandoz develops, manufactures, distributes and sells prescription medicines, as well as pharmaceutical active substances that are not protected by valid and enforceable third-party patents. Alcon researches, develops, manufactures, distributes and sells eye care products. Alcon is a provider of eye care with product offerings in eye care devices and vision care. The Company’s range of products includes pharmaceuticals and oncology medicines, generic and biosimilar medicines, and eye care devices.

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