Teva Pharmaceutical Industries (NYSE:TEVA) versus Chugai Pharmaceutical (OTCMKTS:CHGCY) Critical Analysis

Chugai Pharmaceutical (OTCMKTS:CHGCY) and Teva Pharmaceutical Industries (NYSE:TEVA) are both large-cap healthcare companies, but which is the better stock? We will contrast the two companies based on the strength of their earnings, institutional ownership, valuation, risk, dividends, profitability and analyst recommendations.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Chugai Pharmaceutical and Teva Pharmaceutical Industries, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Chugai Pharmaceutical	0	3	1	1	2.60
Teva Pharmaceutical Industries	0	1	10	0	2.91

Teva Pharmaceutical Industries has a consensus target price of $43.10, indicating a potential upside of 11.63%. Given Teva Pharmaceutical Industries’ stronger consensus rating and higher probable upside, analysts clearly believe Teva Pharmaceutical Industries is more favorable than Chugai Pharmaceutical.

Earnings and Valuation

This table compares Chugai Pharmaceutical and Teva Pharmaceutical Industries”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Chugai Pharmaceutical	$8.41 billion	8.03	$2.91 billion	$0.92	22.33
Teva Pharmaceutical Industries	$17.26 billion	2.61	$1.41 billion	$0.60	64.35

Chugai Pharmaceutical has higher earnings, but lower revenue than Teva Pharmaceutical Industries. Chugai Pharmaceutical is trading at a lower price-to-earnings ratio than Teva Pharmaceutical Industries, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Chugai Pharmaceutical and Teva Pharmaceutical Industries’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Chugai Pharmaceutical	35.09%	23.76%	19.92%
Teva Pharmaceutical Industries	4.08%	32.64%	6.34%

Volatility and Risk

Chugai Pharmaceutical has a beta of 0.59, suggesting that its share price is 41% less volatile than the S&P 500. Comparatively, Teva Pharmaceutical Industries has a beta of 0.87, suggesting that its share price is 13% less volatile than the S&P 500.

Institutional & Insider Ownership

0.0% of Chugai Pharmaceutical shares are owned by institutional investors. Comparatively, 54.0% of Teva Pharmaceutical Industries shares are owned by institutional investors. 0.5% of Teva Pharmaceutical Industries shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Teva Pharmaceutical Industries beats Chugai Pharmaceutical on 9 of the 15 factors compared between the two stocks.

About Chugai Pharmaceutical

Chugai Pharmaceutical Co., Ltd., together with its subsidiaries, engages in the research, development, manufacture, sale, importation, and exportation of pharmaceuticals in Japan and internationally. The company’s products for oncology primarily include Avastin, FoundationOne, Polivy, Rozlytrek, Tecentriq, Perjeta, Alecensa, Herceptin, Kadcyla, Rituxan, and Gazyva; Edirol, an Osteoporosis agent; Mircera, an erythropoiesis agent; Oxarol, an agent for secondary hyperparathyroidism; and other diseases comprise Hemlibra, CellCept, Bonviva, Tamiflu, Evrysdi, Ronapreve, Vabysmo, and Enspryng. It has various development product candidates in the areas of oncology, immunology, neuroscience, hematology, ophthalmology, and other diseases. Chugai Pharmaceutical Co., Ltd. has strategic alliances and collaboration with Roche Group. The company was founded in 1925 and is headquartered in Chuo, Japan. Chugai Pharmaceutical Co., Ltd. operates as a subsidiary of Roche Holding Ltd.

About Teva Pharmaceutical Industries

Teva Pharmaceutical Industries Limited develops, manufactures, markets, and distributes generic medicines, specialty medicines, and biopharmaceutical products in North America, Europe, Israel, and internationally. It offers generic medicines in various dosage forms, such as tablets, capsules, injectables, inhalants, liquids, transdermal patches, ointments, and creams; sterile products, hormones, high-potency drugs, and cytotoxic substances in parenteral and solid dosage forms; and generic products with medical devices and combination products. The company focuses on the central nervous system (CNS), respiratory, and oncology areas. It provides active pharmaceutical ingredients, as well as contract manufacturing services; and operates an out-licensing platform that offers a portfolio of products to other pharmaceutical companies. The company also offers BENDEKA and TREANDA injections for the treatment of chronic lymphocytic leukemia and indolent b-cell non-hodgkin’s lymphoma; GRANIX; TRISENOX; LONQUEX; and TEVAGRASTIM/RATIOGRASTIM. In addition, it provides COPAXONE for the treatment of relapsing forms of multiple sclerosis; AJOVY for the preventive treatment of migraine in adults; AUSTEDO for the treatment of neurodegenerative and movement disorders associated with Huntington’s disease and tardive dyskinesia; UZEDY for the treatment of schizophrenia; ProAir RespiClick inhalation powder; QVAR for treatment for asthma; BRALTUS, a long-acting muscarinic antagonist; CINQAIR/CINQAERO injection; DuoResp Spiromax, an inhaled corticosteroid and long-acting beta-agonist bronchodilator; and AirDuo RespiClick fluticasone propionate and salmeterol inhalation powder. The company offers its OTC products under SUDOCREM, NasenDuo, DICLOX FORTE, OLFEN Max, and FLEGAMINA brand names. It has collaboration agreements with MedinCell; Sanofi; Alvotech; and Biolojic Design Ltd., as well as license agreement with MODAG GmbH. The company was founded in 1901 and is based in Tel Aviv, Israel.