Perrigo (NYSE:PRGO) & Bayer Aktiengesellschaft (OTCMKTS:BAYRY) Financial Survey

Bayer Aktiengesellschaft (OTCMKTS:BAYRY) and Perrigo (NYSE:PRGO) are both healthcare companies, but which is the better stock? We will compare the two businesses based on the strength of their valuation, dividends, risk, profitability, analyst recommendations, earnings and institutional ownership.

Analyst Recommendations

This is a summary of recent recommendations for Bayer Aktiengesellschaft and Perrigo, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bayer Aktiengesellschaft	0	1	5	2	3.12
Perrigo	2	3	1	0	1.83

Perrigo has a consensus target price of $18.50, suggesting a potential upside of 10.27%. Given Perrigo’s higher probable upside, analysts clearly believe Perrigo is more favorable than Bayer Aktiengesellschaft.

Risk & Volatility

Bayer Aktiengesellschaft has a beta of 0.56, indicating that its stock price is 44% less volatile than the S&P 500. Comparatively, Perrigo has a beta of 0.71, indicating that its stock price is 29% less volatile than the S&P 500.

Earnings & Valuation

This table compares Bayer Aktiengesellschaft and Perrigo”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bayer Aktiengesellschaft	$51.55 billion	1.22	-$4.10 billion	($0.46)	-34.74
Perrigo	$4.25 billion	0.55	-$1.43 billion	($12.76)	-1.31

Perrigo has lower revenue, but higher earnings than Bayer Aktiengesellschaft. Bayer Aktiengesellschaft is trading at a lower price-to-earnings ratio than Perrigo, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Bayer Aktiengesellschaft and Perrigo’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bayer Aktiengesellschaft	-3.28%	16.34%	4.33%
Perrigo	-43.27%	12.39%	4.07%

Dividends

Bayer Aktiengesellschaft pays an annual dividend of $0.02 per share and has a dividend yield of 0.1%. Perrigo pays an annual dividend of $1.16 per share and has a dividend yield of 6.9%. Bayer Aktiengesellschaft pays out -4.3% of its earnings in the form of a dividend. Perrigo pays out -9.1% 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. Perrigo has increased its dividend for 23 consecutive years. Perrigo is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Institutional and Insider Ownership

95.9% of Perrigo shares are held by institutional investors. 0.4% of Perrigo shares are held by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a company is poised for long-term growth.

About Bayer Aktiengesellschaft

Bayer Aktiengesellschaft is a German life sciences company headquartered in Leverkusen. Founded in 1863, it develops products and services in pharmaceuticals, consumer health and agriculture. Its Pharmaceuticals business offers prescription medicines, including treatments in areas such as cardiovascular disease, oncology, women’s health and eye care. Consumer Health sells nonprescription medicines and self-care products, with brands including Claritin, Aleve and One A Day. Through its Crop Science business, Bayer provides seeds, crop protection products and agricultural solutions for farmers.

About Perrigo

Perrigo is a global consumer healthcare company that develops, manufactures and markets over-the-counter medicines and other self-care products. Its offerings include treatments for allergies, coughs and colds, pain and digestive health, as well as skin care, oral care and infant nutrition products. The company supplies both its own consumer brands and store-brand products, which retailers sell under their own labels. Perrigo serves customers primarily in North America and Europe through retail and other healthcare channels.