Bayer Aktiengesellschaft (OTCMKTS:BAYRY) and Merck & Co., Inc. (NYSE:MRK) Head-To-Head Contrast

Bayer Aktiengesellschaft (OTCMKTS:BAYRY) and Merck & Co., Inc. (NYSE:MRK) are both large-cap medical companies, but which is the superior stock? We will compare the two companies based on the strength of their risk, valuation, analyst recommendations, earnings, profitability, institutional ownership and dividends.

Insider and Institutional Ownership

76.1% of Merck & Co., Inc. shares are owned by institutional investors. 0.1% of Merck & Co., Inc. shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock is poised for long-term growth.

Volatility & Risk

Bayer Aktiengesellschaft has a beta of 0.85, meaning that its share price is 15% less volatile than the S&P 500. Comparatively, Merck & Co., Inc. has a beta of 0.38, meaning that its share price is 62% less volatile than the S&P 500.

Profitability

This table compares Bayer Aktiengesellschaft and Merck & Co., Inc.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bayer Aktiengesellschaft	-7.26%	13.94%	4.09%
Merck & Co., Inc.	27.27%	43.23%	17.11%

Earnings & Valuation

This table compares Bayer Aktiengesellschaft and Merck & Co., Inc.”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bayer Aktiengesellschaft	$50.44 billion	0.59	-$2.76 billion	($0.92)	-8.29
Merck & Co., Inc.	$64.17 billion	3.14	$17.12 billion	$6.87	11.67

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

Analyst Recommendations

This is a summary of recent ratings and price targets for Bayer Aktiengesellschaft and Merck & Co., Inc., as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bayer Aktiengesellschaft	0	1	1	2	3.25
Merck & Co., Inc.	1	12	6	2	2.43

Merck & Co., Inc. has a consensus price target of $109.19, indicating a potential upside of 36.23%. Given Merck & Co., Inc.’s higher possible upside, analysts clearly believe Merck & Co., Inc. is more favorable than Bayer Aktiengesellschaft.

Dividends

Bayer Aktiengesellschaft pays an annual dividend of $0.02 per share and has a dividend yield of 0.3%. Merck & Co., Inc. pays an annual dividend of $3.24 per share and has a dividend yield of 4.0%. Bayer Aktiengesellschaft pays out -2.2% of its earnings in the form of a dividend. Merck & Co., Inc. pays out 47.2% 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. Merck & Co., Inc. has raised its dividend for 14 consecutive years. Merck & Co., Inc. is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

Merck & Co., Inc. beats Bayer Aktiengesellschaft on 14 of the 17 factors compared between the two stocks.

About Bayer Aktiengesellschaft

Bayer Aktiengesellschaft, together its subsidiaries, operates as a life science company worldwide. It operates through Pharmaceuticals, Consumer Health, and Crop Science segments. The Pharmaceuticals segment offers prescription products primarily for cardiology and women’s health care; specialty therapeutics in the areas of oncology, hematology, and ophthalmology; and diagnostic imaging equipment and digital solutions, and contrast agents, as well as cell and gene therapy. The Consumer Health segment markets nonprescription over-the-counter medicines for self-medication and self-care; and solutions for nutritional supplements, allergy, cough and cold, dermatology, pain and cardiovascular risk prevention, and digestive health. This segment also provides breeding, propagation, and production/processing of seeds, including seed dressing. The company has a collaboration with Acuitas Therapeutics, Inc. to strengthen gene editing programs; Peking University in the area of basic pharmaceutical research; the Swiss Tropical and Public Health Institute in the development of the compound emodepside for the treatment of infection with soil-transmitted helminths; bit.bio Ltd. for the discovery and manufacture of regulatory T cells for use in creating therapeutics; Hologic, Inc. in the field of contrastenhanced-mammography solutions to improve diagnostic imaging for the detection of breast cancer; and Twist Bioscience Corporation centering around the research and development of antibody-based pharmaceuticals, as well as with CrossBay Medical Inc. It distributes its products through wholesalers, pharmacies and pharmacy chains, supermarkets, online and other retailers, and hospitals, as well as directly to farmers. The company has collaboration with Thermo Fisher Scientific. Bayer Aktiengesellschaft was founded in 1863 and is based in Leverkusen, Germany.

About Merck & Co., Inc.

Merck & Co., Inc. is a health care company, which engages in the provision of health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products. It operates through the following segments: Pharmaceutical, Animal Health, and Other. The Pharmaceutical segment includes human health pharmaceutical and vaccine products. The Animal Health segment discovers, develops, manufactures, and markets animal health products, such as pharmaceutical and vaccine products, for the prevention, treatment and control of disease in livestock, and companion animal species. The Other segment consists of sales for the non-reportable segments of healthcare services. The company was founded in 1891 and is headquartered in Rahway, NJ.