Novartis AG (NYSE: NVS) and Corium International (NASDAQ:CORI) are both medical companies, but which is the better business? We will contrast the two businesses based on the strength of their institutional ownership, profitabiliy, earnings, analyst recommendations, valuation, risk and dividends.

Profitability

This table compares Novartis AG and Corium International’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Novartis AG 13.52% 15.51% 8.41%
Corium International -116.59% -1,550.00% -56.92%

Valuation and Earnings

This table compares Novartis AG and Corium International’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Novartis AG $49.18 billion 4.05 $14.45 billion $2.74 30.73
Corium International $32.84 million 7.76 -$28.18 million ($1.64) -5.32

Novartis AG has higher revenue and earnings than Corium International. Corium International is trading at a lower price-to-earnings ratio than Novartis AG, indicating that it is currently the more affordable of the two stocks.

Dividends

Novartis AG pays an annual dividend of $2.30 per share and has a dividend yield of 2.7%. Corium International does not pay a dividend. Novartis AG pays out 83.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Risk and Volatility

Novartis AG has a beta of 0.73, suggesting that its stock price is 27% less volatile than the S&P 500. Comparatively, Corium International has a beta of 1.13, suggesting that its stock price is 13% more volatile than the S&P 500.

Insider & Institutional Ownership

11.3% of Novartis AG shares are owned by institutional investors. Comparatively, 77.5% of Corium International shares are owned by institutional investors. 0.0% of Novartis AG shares are owned by insiders. Comparatively, 45.7% of Corium International shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Analyst Recommendations

This is a breakdown of recent ratings and target prices for Novartis AG and Corium International, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Novartis AG 2 7 6 0 2.27
Corium International 0 0 6 0 3.00

Novartis AG presently has a consensus price target of $82.27, suggesting a potential downside of 2.29%. Corium International has a consensus price target of $12.00, suggesting a potential upside of 37.61%. Given Corium International’s stronger consensus rating and higher probable upside, analysts clearly believe Corium International is more favorable than Novartis AG.

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.

Corium International Company Profile

Corium International, Inc. is a commercial-stage biopharmaceutical company focused on the development, manufacture and commercialization of specialty pharmaceutical products. As of September 30, 2016, the Company had multiple programs in preclinical and clinical development focused primarily on the treatment of neurological disorders, with two lead programs in Alzheimer’s disease. The Company has two transdermal platforms: Corplex for small molecules and MicroCor, a biodegradable microstructure technology for small molecules and biologics, including vaccines, peptides and proteins. Its late-stage pipeline includes a contraceptive patch, which has completed Phase III trials, and additional transdermal products that are being developed with other partners. Its products include Clonidine TDS, Fentanyl TDS and Crest Whitestrips. Its pipeline products include Twirla, Corplex Donepezil and Corplex Memantine, Donepezil, Corplex Ropinerole, MicroCor hPTH(1-34) and Motion Sickness Patch.

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