Merck & (NYSE: MRK) and Amphastar Pharmaceuticals (NASDAQ:AMPH) are both medical companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, profitability, analyst recommendations, dividends, earnings, risk and valuation.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Merck & and Amphastar Pharmaceuticals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Merck & 1 8 10 0 2.47
Amphastar Pharmaceuticals 0 1 5 0 2.83

Merck & presently has a consensus price target of $69.13, indicating a potential upside of 7.57%. Amphastar Pharmaceuticals has a consensus price target of $19.83, indicating a potential upside of 26.49%. Given Amphastar Pharmaceuticals’ stronger consensus rating and higher probable upside, analysts clearly believe Amphastar Pharmaceuticals is more favorable than Merck &.

Profitability

This table compares Merck & and Amphastar Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Merck & 17.14% 26.02% 11.15%
Amphastar Pharmaceuticals 1.61% 2.42% 1.84%

Earnings & Valuation

This table compares Merck & and Amphastar Pharmaceuticals’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Merck & $40.02 billion 4.38 $15.45 billion $2.47 26.02
Amphastar Pharmaceuticals $249.62 million 2.90 $17.41 million $0.08 196.02

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

Risk & Volatility

Merck & has a beta of 0.81, meaning that its share price is 19% less volatile than the S&P 500. Comparatively, Amphastar Pharmaceuticals has a beta of 1.66, meaning that its share price is 66% more volatile than the S&P 500.

Dividends

Merck & pays an annual dividend of $1.88 per share and has a dividend yield of 2.9%. Amphastar Pharmaceuticals does not pay a dividend. Merck & pays out 76.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Amphastar Pharmaceuticals has raised its dividend for 5 consecutive years.

Insider & Institutional Ownership

73.0% of Merck & shares are owned by institutional investors. Comparatively, 44.5% of Amphastar Pharmaceuticals shares are owned by institutional investors. 0.1% of Merck & shares are owned by insiders. Comparatively, 11.1% of Amphastar Pharmaceuticals shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a company will outperform the market over the long term.

Summary

Merck & beats Amphastar Pharmaceuticals on 10 of the 17 factors compared between the two stocks.

About Merck &

Merck & Co., Inc. is a global healthcare company. The Company offers health solutions through its prescription medicines, vaccines, biologic therapies and animal health products. It operates through four segments: Pharmaceutical, Animal Health, Healthcare Services and Alliances. The Company’s Pharmaceutical segment includes human health pharmaceutical and vaccine products marketed either directly by the Company or through joint ventures. Human health pharmaceutical products consist of therapeutic and preventive agents, generally sold by prescription, for the treatment of human disorders. The Company sells its human health pharmaceutical products primarily to drug wholesalers and retailers, hospitals, government agencies and managed healthcare providers, such as health maintenance organizations, pharmacy benefit managers and other institutions. Vaccine products consist of preventive pediatric, adolescent and adult vaccines, primarily administered at physician offices.

About Amphastar Pharmaceuticals

Amphastar Pharmaceuticals, Inc. is a specialty pharmaceutical company. The Company focuses primarily on developing, manufacturing, marketing and selling generic and injectable, inhalation and intranasal products. The Company has two segments: finished pharmaceutical products and active pharmaceutical ingredients (API) products. The finished pharmaceutical products segment manufactures, markets and distributes enoxaparin, Cortrosyn, Amphadase, naloxone, lidocaine jelly, as well as various other critical and non-critical care drugs. The API segment manufactures and distributes recombinant human insulin and porcine insulin. The Company also manufactures and sells insulin API. As of December 31, 2016, the Company manufactured and sold 19 products. As of December 31, 2016, the Company developed a portfolio of 15 generic abbreviated new drug applications (ANDAs) three generic biosimilar product candidates and six injectable and inhalation product candidates.

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