Contrasting Merck KGaA (OTCMKTS:MKKGY) & Rigel Pharmaceuticals (NASDAQ:RIGL)

Rigel Pharmaceuticals (NASDAQ:RIGL) and Merck KGaA (OTCMKTS:MKKGY) are both medical companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, analyst recommendations, valuation, earnings, risk, institutional ownership and profitability.

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Rigel Pharmaceuticals and Merck KGaA, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Rigel Pharmaceuticals	1	3	3	0	2.29
Merck KGaA	0	3	0	0	2.00

Rigel Pharmaceuticals currently has a consensus target price of $43.20, indicating a potential upside of 24.78%. Given Rigel Pharmaceuticals’ stronger consensus rating and higher possible upside, analysts clearly believe Rigel Pharmaceuticals is more favorable than Merck KGaA.

Risk and Volatility

Rigel Pharmaceuticals has a beta of 1.11, suggesting that its share price is 11% more volatile than the S&P 500. Comparatively, Merck KGaA has a beta of 0.96, suggesting that its share price is 4% less volatile than the S&P 500.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Rigel Pharmaceuticals	40.17%	204.70%	57.42%
Merck KGaA	13.92%	10.07%	5.92%

Insider and Institutional Ownership

66.2% of Rigel Pharmaceuticals shares are owned by institutional investors. Comparatively, 0.1% of Merck KGaA shares are owned by institutional investors. 9.0% of Rigel Pharmaceuticals shares are owned by company insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a company is poised for long-term growth.

Earnings and Valuation

This table compares Rigel Pharmaceuticals and Merck KGaA”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Rigel Pharmaceuticals	$179.28 million	3.50	$17.49 million	$6.17	5.61
Merck KGaA	$22.57 billion	0.86	$3.00 billion	$2.51	11.90

Merck KGaA has higher revenue and earnings than Rigel Pharmaceuticals. Rigel Pharmaceuticals is trading at a lower price-to-earnings ratio than Merck KGaA, indicating that it is currently the more affordable of the two stocks.

Summary

Rigel Pharmaceuticals beats Merck KGaA on 11 of the 14 factors compared between the two stocks.

About Rigel Pharmaceuticals

Rigel Pharmaceuticals, Inc., a biotechnology company, engages in discovering, developing, and providing therapies that enhance the lives of patients with hematologic disorders and cancer. The company’s commercialized products include Tavalisse, an oral spleen tyrosine kinase inhibitor for the treatment of adult patients with chronic immune thrombocytopenia; Rezlidhia, a non-intensive monotherapy for the treatment of adult patients with relapsed or refractory (R/R) acute myeloid leukemia (AML) with a susceptible isocitrate dehydrogenase-1 (IDH1) mutation as detected by an FDA-approved test; and GAVRETO, a once daily, small molecule, oral, kinase inhibitor for the treatment of adult patients with metastatic rearranged during transfection (RET) fusion-positive non-small cell lung cancer, as well as for the treatment of adult and pediatric patients 12 years of age and older with advanced or metastatic RET fusion-positive thyroid cancer. It also develops R289, an oral IRAK1/4 Inhibitor, which is in Phase 1b clinical trials for the treatment of hematology-oncology, autoimmune, and inflammatory diseases; and a receptor-interacting serine/threonine-protein kinase 1 (RIPK1) inhibitor program in clinical development with partner Eli Lilly and Company. In addition, the company has product candidates in clinical development with partners BerGenBio ASA and Daiichi Sankyo. The company has strategic development collaboration with The University of Texas MD Anderson Cancer Center for the development of REZLIDHIA (Olutasidenib) in acute myeloid leukemia (AML) and other hematologic cancers. The company was incorporated in 1996 and is headquartered in South San Francisco, California.

About Merck KGaA

Merck KGaA operates as a science and technology company in Germany. It operates through Life Science, Healthcare, and Electronics segments. The company’s Life Science segment offers tools, chemicals, and equipment for academic labs, biotech, and pharmaceutical manufacturers, as well as industrial sector. This segment provides drug manufacturers with process development expertise and technologies, such as continuous bioprocessing; testing kits and services; reagents and services; testing solutions that analyze air, water, and soil; and testing and tools, as well as products that help test nutritional value and identify quality inconsistencies. Its Healthcare segment discovers, develops, manufacturers, and markets prescription drugs and biopharmaceuticals for the treatment of oncology, neurology and immunology, fertility, endocrinology, as well as cardiovascular, diabetes, thyroid disorders, and multiple sclerosis; general medicines; and injection device and disease monitoring software. The Electronics segment supplies materials for the semiconductor and display industries and surface design, such as delivery systems and services, as well as surface solutions, including cosmetics, effect pigments, and functional solutions. In addition, it has in-licensing agreement with Debiopharm International SA for developing and commercializing drug candidates for the treatment of head and neck cancer; Jiangsu Hengrui Pharmaceuticals Co. Ltd. for developing, manufacturing, and commercializing drug candidates for the treatment of metastatic colorectal cancer; and Abbisko Therapeutics Co. Ltd. for developing and commercializing of drug candidates for the treatment of tenosynovial giant cell tumor, as well as license and collaboration agreement with Merck KGaA to discover two targeted protein degraders against critical oncogenic proteins. The company was founded in 1668 and is headquartered in Darmstadt, Germany. Merck KGaA operates as a subsidiary of E. Merck KGaA.