Critical Survey: Perrigo (NYSE:PRGO) and Pfizer (NYSE:PFE)

Pfizer (NYSE:PFE) and Perrigo (NYSE:PRGO) are both healthcare companies, but which is the superior business? We will contrast the two businesses based on the strength of their earnings, dividends, profitability, institutional ownership, risk, analyst recommendations and valuation.

Analyst Recommendations

This is a summary of recent ratings and target prices for Pfizer and Perrigo, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Pfizer	2	14	4	1	2.19
Perrigo	1	4	1	0	2.00

Pfizer presently has a consensus target price of $28.39, suggesting a potential downside of 1.00%. Perrigo has a consensus target price of $19.33, suggesting a potential upside of 25.33%. Given Perrigo’s higher probable upside, analysts plainly believe Perrigo is more favorable than Pfizer.

Earnings and Valuation

This table compares Pfizer and Perrigo”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Pfizer	$62.58 billion	2.61	$7.77 billion	$0.76	37.73
Perrigo	$4.25 billion	0.50	-$1.43 billion	($12.51)	-1.23

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

Insider & Institutional Ownership

68.4% of Pfizer shares are owned by institutional investors. Comparatively, 95.9% of Perrigo shares are owned by institutional investors. 0.6% of Pfizer shares are owned by insiders. Comparatively, 0.4% of Perrigo shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.

Dividends

Pfizer pays an annual dividend of $1.72 per share and has a dividend yield of 6.0%. Perrigo pays an annual dividend of $1.16 per share and has a dividend yield of 7.5%. Pfizer pays out 226.3% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Perrigo pays out -9.3% of its earnings in the form of a dividend. Pfizer has increased its dividend for 16 consecutive years and 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.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Pfizer	6.80%	19.63%	8.46%
Perrigo	-41.85%	11.25%	4.08%

Volatility and Risk

Pfizer has a beta of 0.34, indicating that its stock price is 66% less volatile than the S&P 500. Comparatively, Perrigo has a beta of 0.59, indicating that its stock price is 41% less volatile than the S&P 500.

Summary

Pfizer beats Perrigo on 12 of the 18 factors compared between the two stocks.

About Pfizer

Pfizer Inc. discovers, develops, manufactures, markets, distributes, and sells biopharmaceutical products in the United States, Europe, and internationally. The company offers medicines and vaccines in various therapeutic areas, including cardiovascular metabolic, migraine, and women's health under the Eliquis, Nurtec ODT/Vydura, Zavzpret, and the Premarin family brands; infectious diseases with unmet medical needs under the Prevnar family, Abrysvo, Nimenrix, FSME/IMMUN-TicoVac, and Trumenba brands; and COVID-19 prevention and treatment, and potential future mRNA and antiviral products under the Comirnaty and Paxlovid brands. It also provides medicines and vaccines in various therapeutic areas, such as biosimilars for chronic immune and inflammatory diseases under the Xeljanz, Enbrel, Inflectra, Litfulo, Velsipity, and Cibinqo brands; amyloidosis, hemophilia, endocrine diseases, and sickle cell disease under the Vyndaqel family, Oxbryta, BeneFIX, Somavert, Ngenla, and Genotropin brands; sterile injectable and anti-infective medicines under the Sulperazon, Medrol, Zavicefta, Zithromax, and Panzyga brands; and biologics, small molecules, immunotherapies, and biosimilars under the Ibrance, Xtandi, Inlyta, Bosulif, Mektovi, Padcev, Adcetris, Talzenna, Tukysa, Elrexfio, Tivdak, Lorbrena, and Braftovi brands. In addition, the company involved in the contract manufacturing business. It serves wholesalers, retailers, hospitals, clinics, government agencies, pharmacies, individual provider offices, retail pharmacies, and integrated delivery systems. The company has collaboration agreements with Bristol-Myers Squibb Company; Astellas Pharma US, Inc.; Merck KGaA; and BioNTech SE. Pfizer Inc. was founded in 1849 and is headquartered in New York, New York.

About Perrigo

Perrigo Company plc provides over-the-counter health and wellness solutions to enhance individual well-being in the United States, Europe, and internationally. It operates through Consumer Self-Care Americas and Consumer Self-Care International segments. The company develops, manufactures, markets, and distributes self-care consumer products, such as upper respiratory products, including cough suppressants, expectorants, and sinus and allergy relief; nutrition products consisting of infant formulas and nutritional beverages; digestive health products, including antacids, anti-diarrheal, and anti-heartburn; pain and sleep-aids products comprising pain relievers and fever reducers; and oral care products, which include toothbrushes, toothbrush replacement heads, floss, flossers, whitening products, and toothbrush covers. It also offers healthy lifestyle products, such as smoking cessation, well-being, and weight management products; skin care products consisting of dermatological care, scar management, lice treatment, and other products for various skin conditions; women's health products comprising feminine hygiene and contraceptives; vitamins, minerals, and supplements; rare diseases business; and other miscellaneous self-care products. The company sells its products under the Compeed, Dr. Fresh, Firefly, Good Sense, Good Start, Mederma, Nasonex, Plackers, Prevacid24HR, REACH, Rembrandt, Steripod, Opill, Solpadeine, Coldrex, Physiomer, NiQuitin, ACO, ellaOne, Compeed Stops, XLS, Arterin, Davitamon, Apiserum, Abtei, and Nicorette brands. It also offers contract manufacturing services. The company sells its products through retail drug, supermarket, and mass merchandise chains; e-commerce stores; wholesalers; pharmacies; drug and grocery retailers; and para-pharmacies. The company was formerly known as Perrigo Company and changed its name to Perrigo Company plc in December 2013. Perrigo Company plc was founded in 1887 and is headquartered in Dublin, Ireland.