Analyzing Novo Nordisk A/S (NYSE:NVO) & Astellas Pharma (OTCMKTS:ALPMY)

Astellas Pharma (OTCMKTS:ALPMY) and Novo Nordisk A/S (NYSE:NVO) are both large-cap healthcare companies, but which is the superior investment? We will compare the two businesses based on the strength of their analyst recommendations, institutional ownership, dividends, earnings, risk, valuation and profitability.

Profitability

This table compares Astellas Pharma and Novo Nordisk A/S’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Astellas Pharma	16.01%	25.79%	12.87%
Novo Nordisk A/S	35.36%	58.61%	20.91%

Analyst Ratings

This is a breakdown of current recommendations for Astellas Pharma and Novo Nordisk A/S, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Astellas Pharma	0	3	0	1	2.50
Novo Nordisk A/S	5	16	5	0	2.00

Novo Nordisk A/S has a consensus target price of $59.44, indicating a potential upside of 52.53%. Given Novo Nordisk A/S’s higher probable upside, analysts plainly believe Novo Nordisk A/S is more favorable than Astellas Pharma.

Insider and Institutional Ownership

11.5% of Novo Nordisk A/S shares are held by institutional investors. 0.1% of Novo Nordisk A/S shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Astellas Pharma and Novo Nordisk A/S”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Astellas Pharma	$14.21 billion	2.03	$1.83 billion	$1.31	12.15
Novo Nordisk A/S	$46.80 billion	3.72	$15.51 billion	$4.09	9.53

Novo Nordisk A/S has higher revenue and earnings than Astellas Pharma. Novo Nordisk A/S is trading at a lower price-to-earnings ratio than Astellas Pharma, indicating that it is currently the more affordable of the two stocks.

Volatility and Risk

Astellas Pharma has a beta of 0.08, indicating that its stock price is 92% less volatile than the S&P 500. Comparatively, Novo Nordisk A/S has a beta of 0.76, indicating that its stock price is 24% less volatile than the S&P 500.

Dividends

Astellas Pharma pays an annual dividend of $0.29 per share and has a dividend yield of 1.8%. Novo Nordisk A/S pays an annual dividend of $0.82 per share and has a dividend yield of 2.1%. Astellas Pharma pays out 22.1% of its earnings in the form of a dividend. Novo Nordisk A/S pays out 20.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Novo Nordisk A/S is clearly the better dividend stock, given its higher yield and lower payout ratio.

Summary

Novo Nordisk A/S beats Astellas Pharma on 14 of the 17 factors compared between the two stocks.

About Astellas Pharma

Astellas Pharma Inc. manufactures, markets, and imports and exports pharmaceuticals in Japan and internationally. The company provides XTANDI, a treatment for prostate cancer; XOSPATA, a treatment for patients who have relapsed or refractory acute myeloid leukemia with a FLT3 mutation; and PADCEV, a treatment for patients with metastatic urothelial cancer. It also offers Evrenzo, a treatment for anemia associated with chronic kidney disease; Betanis/Myrabetriq/BETMIGA, a treatment for overactive bladder; and Prograf and Advagraf/Graceptor/ASTAGRAF XL immunosuppressants. Th company has a research collaboration with Vivtex Corporation to evaluate Vivtex’s GI-ORIS screening and formulation platform technology to support the development of novel and oral versions of a therapeutic candidate provided by Astellas; and a partnership agreement with Roche Diabetes Care Japan Co., Ltd. to develop and commercialize integrated diabetes self-management solution. The company was founded in 1923 and is headquartered in Tokyo, Japan.

About Novo Nordisk A/S

Novo Nordisk A/S, together with its subsidiaries, engages in the research and development, manufacture, and distribution of pharmaceutical products in Europe, the Middle East, Africa, Mainland China, Hong Kong, Taiwan, North America, and internationally. It operates in two segments, Diabetes and Obesity Care, and Rare Disease. The Diabetes and Obesity care segment provides products for diabetes, obesity, cardiovascular, and other emerging therapy areas. The Rare Disease segment offers products in the areas of rare blood disorders, rare endocrine disorders, and hormone replacement therapy. The company also provides insulin pens, growth hormone pens, and injection needles. In addition, it offers smart solutions for diabetes treatment, such as smart insulin pens and Dose Check, an insulin dose guidance application. The company has a collaboration agreement with Aspen Pharmaceuticals to produce insulin products; and with Korro Bio, Inc. for the discovery and development of new genetic medicines to treat cardiometabolic diseases. Novo Nordisk A/S was founded in 1923 and is headquartered in Bagsvaerd, Denmark.