Merck KGaA (OTCMKTS:MKGAF) and Intercept Pharmaceuticals (NASDAQ:ICPT) are both medical companies, but which is the superior investment? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, institutional ownership, earnings, profitability and risk.

Earnings & Valuation

This table compares Merck KGaA and Intercept Pharmaceuticals’ top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Merck KGaA $17.52 billion 0.83 $3.98 billion N/A N/A
Intercept Pharmaceuticals $179.80 million 12.71 -$309.24 million ($10.86) -6.43

Merck KGaA has higher revenue and earnings than Intercept Pharmaceuticals.

Insider and Institutional Ownership

81.0% of Intercept Pharmaceuticals shares are owned by institutional investors. 5.0% of Intercept Pharmaceuticals shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Risk & Volatility

Merck KGaA has a beta of 0.68, indicating that its stock price is 32% less volatile than the S&P 500. Comparatively, Intercept Pharmaceuticals has a beta of 1.21, indicating that its stock price is 21% more volatile than the S&P 500.

Profitability

This table compares Merck KGaA and Intercept Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Merck KGaA 21.17% 12.88% 5.70%
Intercept Pharmaceuticals -143.57% -534.42% -53.31%

Analyst Ratings

This is a breakdown of current ratings and price targets for Merck KGaA and Intercept Pharmaceuticals, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Merck KGaA 0 0 0 0 N/A
Intercept Pharmaceuticals 2 3 15 0 2.65

Intercept Pharmaceuticals has a consensus price target of $136.58, suggesting a potential upside of 95.45%. Given Intercept Pharmaceuticals’ higher possible upside, analysts clearly believe Intercept Pharmaceuticals is more favorable than Merck KGaA.

About Merck KGaA

MERCK Kommanditgesellschaft auf Aktien operates in the healthcare, life science, and performance materials sectors worldwide. It offers prescription medicines to treat cancer, multiple sclerosis, infertility, growth deficiencies, type 2 diabetes, cardiovascular and thyroid diseases, as well as squamous cell carcinoma of the head and neck; diagnostics and prescription drugs for allergen immunotherapy; and fertility treatments. The company also provides life science products and services for use in the discovery, development, and manufacture of drug therapies, as well as in laboratories; and specialty chemicals for use in displays, computer chips, surfaces, Integrated circuits, microelectronic systems, anti-reflection coatings, and cosmetics. It has alliances with Pfizer Inc., Bristol-Myers Squibb Company, Intrexon Corporation, Avillion LLP., F-star Delta Ltd, SFJ Pharmaceuticals Group, Alibaba Health, Checkmate Pharmaceuticals, Solvias, and Leap Therapeutics, Inc., as well as a collaboration with Daiichi Sankyo Company, Limited. The company was founded in 1668 and is headquartered in Darmstadt, Germany. MERCK Kommanditgesellschaft auf Aktien is a subsidiary of E. Merck Kommanditgesellschaft.

About Intercept Pharmaceuticals

Intercept Pharmaceuticals, Inc., a biopharmaceutical company, focuses on the development and commercialization of therapeutics to treat progressive non-viral liver diseases. It markets Ocaliva, an farnesoid X receptor agonist approved in the United States, the European Union, and other jurisdictions for the treatment of primary biliary cholangitis (PBC) in combination with ursodeoxycholic acid in adults. The company is also developing Ocaliva for various indications, including nonalcoholic steatohepatitis (NASH); and several other product candidates in various stages of clinical and preclinical development. Intercept Pharmaceuticals, Inc. has a license agreement with Sumitomo Dainippon Pharma Co. Ltd. for the research, development, and commercialization of OCA as a therapeutic for the treatment of PBC and NASH in Japan and China. The company was founded in 2002 and is headquartered in New York, New York.

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