Head-To-Head Analysis: Merck & Co., Inc. (NYSE:MRK) vs. Sanofi (NASDAQ:SNY)

Merck & Co., Inc. (NYSE:MRK) and Sanofi (NASDAQ:SNY) are both large-cap medical companies, but which is the better business? We will compare the two businesses based on the strength of their valuation, earnings, profitability, dividends, risk, institutional ownership and analyst recommendations.

Profitability

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

	Net Margins	Return on Equity	Return on Assets
Merck & Co., Inc.	27.27%	43.23%	17.11%
Sanofi	14.56%	17.15%	9.80%

Earnings & Valuation

This table compares Merck & Co., Inc. and Sanofi”s top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Merck & Co., Inc.	$63.92 billion	3.18	$17.12 billion	$6.87	11.79
Sanofi	$44.46 billion	2.70	$6.02 billion	$2.80	17.46

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

Analyst Recommendations

This is a breakdown of recent ratings for Merck & Co., Inc. and Sanofi, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Merck & Co., Inc.	1	12	6	2	2.43
Sanofi	0	2	4	3	3.11

Merck & Co., Inc. currently has a consensus target price of $109.19, indicating a potential upside of 34.85%. Sanofi has a consensus target price of $61.50, indicating a potential upside of 25.81%. Given Merck & Co., Inc.’s higher possible upside, equities analysts plainly believe Merck & Co., Inc. is more favorable than Sanofi.

Insider and Institutional Ownership

76.1% of Merck & Co., Inc. shares are held by institutional investors. Comparatively, 14.0% of Sanofi shares are held by institutional investors. 0.1% of Merck & Co., Inc. shares are held by company insiders. Comparatively, 1.0% of Sanofi shares are held 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.

Dividends

Merck & Co., Inc. pays an annual dividend of $3.24 per share and has a dividend yield of 4.0%. Sanofi pays an annual dividend of $1.60 per share and has a dividend yield of 3.3%. Merck & Co., Inc. pays out 47.2% of its earnings in the form of a dividend. Sanofi pays out 57.1% 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. Merck & Co., Inc. has increased 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.

Volatility and Risk

Merck & Co., Inc. has a beta of 0.39, meaning that its share price is 61% less volatile than the S&P 500. Comparatively, Sanofi has a beta of 0.48, meaning that its share price is 52% less volatile than the S&P 500.

Summary

Merck & Co., Inc. beats Sanofi on 13 of the 18 factors compared between the two stocks.

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.

About Sanofi

Sanofi, a healthcare company, engages in the research, development, manufacture, and marketing of therapeutic solutions in the United States, Europe, Canada, and internationally. It operates through Pharmaceuticals, Vaccines, and Consumer Healthcare segments. The company provides specialty care, such as DUPIXENT, neurology and immunology, rare diseases, oncology, and rare blood disorders; medicines for diabetes and cardiovascular diseases; and established prescription products. In addition, it offers poliomyelitis, pertussis, and hib pediatric vaccines; influenza, booster, meningitis, and travel and endemic vaccines, which includes hepatitis A, typhoid, cholera, yellow fever, and rabies vaccines. The company also provides cough, cold, and flu, allergy, and pain care products, as well as physical, mental, and digestive wellness products; and offers products for itching, hydration, aging, cracking, overnight, and specialty skincare needs like eczema. Further, it has a collaboration and license agreement with Exscientia to develop up to 15 novel small-molecule for oncology and immunology; ABL Bio, Inc. to develop ABL301, a treatment for alpha-synucleinopathies; Blackstone Life Sciences to develop pivotal studies and clinical development program; and Seagen Inc. to design, develop, and commercialize antibody-drug conjugates for cancer. Additionally, the company has a collaboration agreement with IGM Biosciences, Inc. to develop, manufacture, and commercialize IgM antibody; Skyhawk Therapeutics, Inc to discover and develop novel small molecules; and Adagene Inc., for the discovery and development of antibody-based therapies. It also has collaborations with Scribe Therapeutics Inc. to develop genome editing technologies; and co-promotion service agreement with Provention Bio, Inc. for the commercialization of teplizumab. The company was formerly known as Sanofi-Aventis and changed its name to Sanofi in May 2011. Sanofi was incorporated in 1994 and is headquartered in Paris, France.