Innoviva (NASDAQ: INVA) and Johnson & Johnson (NYSE:JNJ) are both healthcare companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, profitability, analyst recommendations, institutional ownership, earnings, valuation and risk.

Earnings and Valuation

This table compares Innoviva and Johnson & Johnson’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Innoviva $133.57 million 10.80 $59.53 million $0.79 16.91
Johnson & Johnson $71.89 billion 5.30 $16.54 billion $5.76 24.64

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

Analyst Ratings

This is a breakdown of recent ratings and price targets for Innoviva and Johnson & Johnson, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Innoviva 1 3 1 0 2.00
Johnson & Johnson 4 4 10 0 2.33

Innoviva presently has a consensus target price of $13.00, indicating a potential downside of 2.69%. Johnson & Johnson has a consensus target price of $145.12, indicating a potential upside of 2.23%. Given Johnson & Johnson’s stronger consensus rating and higher probable upside, analysts plainly believe Johnson & Johnson is more favorable than Innoviva.

Profitability

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

Net Margins Return on Equity Return on Assets
Innoviva 52.91% -33.55% 26.40%
Johnson & Johnson 21.28% 27.38% 13.20%

Volatility & Risk

Innoviva has a beta of 2.53, meaning that its share price is 153% more volatile than the S&P 500. Comparatively, Johnson & Johnson has a beta of 0.8, meaning that its share price is 20% less volatile than the S&P 500.

Insider & Institutional Ownership

74.5% of Innoviva shares are held by institutional investors. Comparatively, 65.9% of Johnson & Johnson shares are held by institutional investors. 1.6% of Innoviva shares are held by insiders. Comparatively, 0.2% of Johnson & Johnson 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.

Dividends

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

Summary

Johnson & Johnson beats Innoviva on 10 of the 17 factors compared between the two stocks.

About Innoviva

Innoviva, Inc., formerly Theravance, Inc., is engaged in the development, commercialization and financial management of bio-pharmaceuticals. It focuses on the respiratory assets partnered with Glaxo Group Limited (GSK), including RELVAR/BREO ELLIPTA (fluticasone furoate (FF)/vilanterol (VI)) and ANORO ELLIPTA (umeclidinium bromide/vilanterol (UMEC/VI)). Under the Long-Acting Beta2 Agonist (LABA) Collaboration Agreement and the Strategic Alliance Agreement with GSK, the Company is eligible to receive the annual royalties from GSK on sales of RELVAR/BREO ELLIPTA. For other products combined with a LABA from the LABA collaboration, such as ANORO ELLIPTA, royalties are upward tiering and range from 6.5% to 10%. RELVAR/BREO is a once-a-day combination inhaled respiratory medicine consisting of a LABA (VI) and an inhaled corticosteroid (ICS), FF. ANORO ELLIPTA a once-daily medicine combining a long-acting muscarinic antagonist (LAMA), umeclidinium bromide (UMEC), with a LABA.

About Johnson & Johnson

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.

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