Analyzing GlaxoSmithKline PLC (GSK) and Eli Lilly and (LLY)
GlaxoSmithKline PLC (NYSE: GSK) and Eli Lilly and (NYSE:LLY) are both large-cap medical companies, but which is the better business? We will compare the two companies based on the strength of their earnings, institutional ownership, dividends, profitability, analyst recommendations, risk and valuation.
This is a breakdown of current recommendations and price targets for GlaxoSmithKline PLC and Eli Lilly and, as reported by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Eli Lilly and||1||6||11||0||2.56|
GlaxoSmithKline PLC presently has a consensus price target of $45.67, indicating a potential upside of 14.17%. Eli Lilly and has a consensus price target of $88.82, indicating a potential upside of 10.33%. Given GlaxoSmithKline PLC’s higher possible upside, research analysts plainly believe GlaxoSmithKline PLC is more favorable than Eli Lilly and.
GlaxoSmithKline PLC pays an annual dividend of $1.97 per share and has a dividend yield of 4.9%. Eli Lilly and pays an annual dividend of $2.08 per share and has a dividend yield of 2.6%. GlaxoSmithKline PLC pays out 197.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Eli Lilly and pays out 90.0% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. GlaxoSmithKline PLC has raised its dividend for 2 consecutive years. GlaxoSmithKline PLC is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.
Institutional and Insider Ownership
9.3% of GlaxoSmithKline PLC shares are owned by institutional investors. Comparatively, 75.8% of Eli Lilly and shares are owned by institutional investors. 10.0% of GlaxoSmithKline PLC shares are owned by insiders. Comparatively, 0.2% of Eli Lilly and 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.
Volatility and Risk
GlaxoSmithKline PLC has a beta of 1.03, meaning that its stock price is 3% more volatile than the S&P 500. Comparatively, Eli Lilly and has a beta of 0.34, meaning that its stock price is 66% less volatile than the S&P 500.
This table compares GlaxoSmithKline PLC and Eli Lilly and’s net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Eli Lilly and||11.12%||28.71%||10.74%|
Valuation & Earnings
This table compares GlaxoSmithKline PLC and Eli Lilly and’s top-line revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||EBITDA||Earnings Per Share||Price/Earnings Ratio|
|GlaxoSmithKline PLC||$38.38 billion||2.55||$10.49 billion||$1.00||40.00|
|Eli Lilly and||$22.00 billion||3.86||$5.99 billion||$2.31||34.85|
GlaxoSmithKline PLC has higher revenue and earnings than Eli Lilly and. Eli Lilly and is trading at a lower price-to-earnings ratio than GlaxoSmithKline PLC, indicating that it is currently the more affordable of the two stocks.
Eli Lilly and beats GlaxoSmithKline PLC on 9 of the 17 factors compared between the two stocks.
GlaxoSmithKline PLC Company Profile
GlaxoSmithKline plc is a global healthcare company. The Company operates through three segments: Pharmaceuticals, Vaccines and Consumer Healthcare. The Company focuses on its research across six areas: Respiratory diseases, human immunodeficiency virus (HIV)/infectious diseases, Vaccines, Immuno-inflammation, Oncology and Rare diseases. The Company makes a range of prescription medicines, vaccines and consumer healthcare products. The Pharmaceuticals business discovers, develops and commercializes medicines to treat a range of acute and chronic diseases. The Vaccines business provides vaccines for people of all ages from babies and adolescents to adults and older people. The Consumer Healthcare business develops and markets products in Wellness, Oral health, Nutrition and Skin health categories. Its product portfolio includes Adartrel, Bexsero, Daraprim and Quinvaxem. Its brands include Panadol, abreva, polident and physiogel.
Eli Lilly and Company Profile
Eli Lilly and Company is engaged in drug manufacturing business. The Company discovers, develops, manufactures and markets products in two segments: human pharmaceutical products and animal health products. The Company’s human pharmaceutical business segment sells medicines, which are discovered or developed by its scientists. Its animal health business segment operates through the Company’s Elanco division, which develops, manufactures and markets products for both food animals and companion animals. The Company’s human pharmaceutical products include endocrinology products, neuroscience products, oncology products, immunology products and cardiovascular products. The Company’s animal health products segment includes products for food animals and products for companion animals. As of December 31, 2016, the Company manufactured and distributed its products through facilities in the United States, Puerto Rico and 14 other countries.
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