Contrasting Perrigo (NYSE:PRGO) & Orion OYJ (OTCMKTS:ORINY)

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

Risk and Volatility

Orion OYJ has a beta of 0.05, meaning that its share price is 95% less volatile than the S&P 500. Comparatively, Perrigo has a beta of 0.71, meaning that its share price is 29% less volatile than the S&P 500.

Dividends

Orion OYJ pays an annual dividend of $0.36 per share and has a dividend yield of 0.6%. Perrigo pays an annual dividend of $1.16 per share and has a dividend yield of 7.0%. Orion OYJ pays out 13.3% 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.

Earnings & Valuation

This table compares Orion OYJ and Perrigo”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Orion OYJ	$2.14 billion	7.56	$566.04 million	$2.71	21.13
Perrigo	$4.25 billion	0.54	-$1.43 billion	($12.76)	-1.30

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

Analyst Recommendations

This is a summary of recent recommendations and price targets for Orion OYJ and Perrigo, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Orion OYJ	0	1	0	1	3.00
Perrigo	2	3	1	0	1.83

Perrigo has a consensus price target of $18.50, indicating a potential upside of 11.61%. Given Perrigo’s higher possible upside, analysts clearly believe Perrigo is more favorable than Orion OYJ.

Institutional & 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 stock will outperform the market over the long term.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Orion OYJ	30.25%	54.09%	33.33%
Perrigo	-43.27%	12.39%	4.07%

About Orion OYJ

Orion Oyj is a Finnish pharmaceutical company that develops, manufactures and markets medicines for human and veterinary use. Its portfolio includes prescription and over-the-counter medicines, as well as active pharmaceutical ingredients supplied to other pharmaceutical companies. Founded in 1917 and headquartered in Espoo, Finland, Orion has a long history in the pharmaceutical industry. The company focuses on areas including oncology, neurology and respiratory diseases, and develops some products in collaboration with international pharmaceutical partners.

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.