Akorn (NASDAQ: AKRX) and Johnson & Johnson (NYSE:JNJ) are both mid-cap medical companies, but which is the superior investment? We will contrast the two companies based on the strength of their earnings, profitability, dividends, institutional ownership, valuation, analyst recommendations and risk.

Valuation & Earnings

This table compares Akorn and Johnson & Johnson’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Akorn $1.02 billion 3.98 $372.04 million $0.99 32.85
Johnson & Johnson $74.36 billion 5.12 $25.02 billion $5.76 24.61

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

Analyst Ratings

This is a summary of recent ratings and recommmendations for Akorn and Johnson & Johnson, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Akorn 2 8 1 0 1.91
Johnson & Johnson 4 5 10 0 2.32

Akorn currently has a consensus target price of $29.13, suggesting a potential downside of 10.44%. Johnson & Johnson has a consensus target price of $143.56, suggesting a potential upside of 1.25%. Given Johnson & Johnson’s stronger consensus rating and higher probable upside, analysts clearly believe Johnson & Johnson is more favorable than Akorn.

Profitability

This table compares Akorn and Johnson & Johnson’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Akorn 12.15% 23.76% 10.11%
Johnson & Johnson 21.28% 27.68% 13.41%

Institutional and Insider Ownership

69.3% of Akorn shares are owned by institutional investors. Comparatively, 65.9% of Johnson & Johnson shares are owned by institutional investors. 28.2% of Akorn shares are owned by company insiders. Comparatively, 0.2% of Johnson & Johnson shares are owned by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

Johnson & Johnson pays an annual dividend of $3.36 per share and has a dividend yield of 2.4%. Akorn does not pay a dividend. Johnson & Johnson pays out 58.3% of its earnings in the form of a dividend. Johnson & Johnson has raised its dividend for 54 consecutive years.

Risk and Volatility

Akorn has a beta of 1.4, indicating that its stock price is 40% more volatile than the S&P 500. Comparatively, Johnson & Johnson has a beta of 0.78, indicating that its stock price is 22% less volatile than the S&P 500.

Summary

Johnson & Johnson beats Akorn on 12 of the 17 factors compared between the two stocks.

Akorn Company Profile

Akorn Inc. (Akorn), together with its subsidiaries, is a specialty generic pharmaceutical company that develops, manufactures and markets generic and branded prescription pharmaceuticals, as well as private-label over-the-counter (OTC) consumer health products and animal health pharmaceuticals. The Company operates through two segments: Prescription Pharmaceuticals and the Consumer Health. The Prescription Pharmaceuticals segment consists of generic and branded prescription pharmaceuticals in a range of dosage forms, including sterile ophthalmics, injectables and inhalants and non-sterile oral liquids, topicals and nasal sprays and otics. The Consumer Health segment consists of branded and private-label OTC products and animal health products dispensed by veterinary professionals. Its branded and private-label OTC products are focused on ophthalmics, including a dry eye treatment TheraTears Therapy for Your Eyes.

Johnson & Johnson Company Profile

Johnson & Johnson is a holding company, which is engaged in the research and development, manufacture and sale of a range of products in the healthcare field. It operates through three segments: Consumer, Pharmaceutical and Medical Devices. Its primary focus is products related to human health and well-being. The Consumer segment includes a range of products used in the baby care, oral care, skin care, over-the-counter pharmaceutical, women’s health and wound care markets. The Pharmaceutical segment is focused on five therapeutic areas, including immunology, infectious diseases, neuroscience, oncology, and cardiovascular and metabolic diseases. The Medical Devices segment includes a range of products used in the orthopedic, surgery, cardiovascular, diabetes care and vision care fields. Its research facilities are located in the United States, Belgium, Brazil, Canada, China, France, Germany, India, Israel, Japan, the Netherlands, Singapore, Switzerland and the United Kingdom.

Receive News & Ratings for Akorn Inc. Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Akorn Inc. and related companies with MarketBeat.com's FREE daily email newsletter.