Contrasting NovoCure (NASDAQ:NVCR) and HUTCHMED (NASDAQ:HCM)

HUTCHMED (NASDAQ:HCM) and NovoCure (NASDAQ:NVCR) are both small-cap medical companies, but which is the better business? We will compare the two companies based on the strength of their dividends, analyst recommendations, profitability, earnings, risk, institutional ownership and valuation.

Profitability

This table compares HUTCHMED and NovoCure’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HUTCHMED	N/A	N/A	N/A
NovoCure	-25.66%	-50.82%	-16.48%

Risk and Volatility

HUTCHMED has a beta of 0.31, suggesting that its stock price is 69% less volatile than the S&P 500. Comparatively, NovoCure has a beta of 0.9, suggesting that its stock price is 10% less volatile than the S&P 500.

Analyst Ratings

This is a summary of recent ratings and target prices for HUTCHMED and NovoCure, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HUTCHMED	1	2	1	1	2.40
NovoCure	1	3	4	0	2.38

HUTCHMED currently has a consensus price target of $16.80, suggesting a potential upside of 46.72%. NovoCure has a consensus price target of $27.29, suggesting a potential upside of 60.13%. Given NovoCure’s higher possible upside, analysts clearly believe NovoCure is more favorable than HUTCHMED.

Institutional and Insider Ownership

8.8% of HUTCHMED shares are held by institutional investors. Comparatively, 84.6% of NovoCure shares are held by institutional investors. 3.6% of HUTCHMED shares are held by company insiders. Comparatively, 5.5% of NovoCure shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Valuation & Earnings

This table compares HUTCHMED and NovoCure”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HUTCHMED	$548.51 million	3.64	$456.91 million	N/A	N/A
NovoCure	$674.41 million	2.93	-$136.23 million	($1.53)	-11.14

HUTCHMED has higher earnings, but lower revenue than NovoCure.

Summary

HUTCHMED beats NovoCure on 7 of the 13 factors compared between the two stocks.

About HUTCHMED

HUTCHMED (China) Ltd. is a holding company, which engages in the research and development, manufacture, and sale of pharmaceuticals and health-oriented consumer products. It operates through the Oncology/Immunology and Other Ventures segments. The Oncology/Immunology segment includes the discovery, development, and commercialization of targeted therapies and immunotherapies for the treatment of cancer and immunological diseases. The Other Ventures segment involves the other commercial businesses which include the sales, marketing, manufacture, and distribution of prescription drugs and healthcare products. The company was founded on December 18, 2000 and is headquartered in Hong Kong.

About NovoCure

NovoCure Limited, an oncology company, engages in the development, manufacture, and commercialization of tumor treating fields (TTFields) devices for the treatment of solid tumor cancers in the United States, Germany, Japan, Greater China, and internationally. The company’s TTFields devices include Optune Gio and Optune Lua. It also has ongoing clinical trials investigating TTFields in brain metastases, gastric cancer, glioblastoma, liver cancer, non-small cell lung cancer, pancreatic cancer, and ovarian cancer. NovoCure Limited was incorporated in 2000 and is headquartered in Saint Helier, Jersey.