Reviewing NovoCure (NASDAQ:NVCR) and HUTCHMED (NASDAQ:HCM)

HUTCHMED (NASDAQ:HCM) and NovoCure (NASDAQ:NVCR) are both mid-cap medical companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, valuation, profitability, risk, earnings and dividends.

Profitability

This table compares HUTCHMED and NovoCure’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
HUTCHMED	N/A	N/A	N/A
NovoCure	-25.66%	-50.82%	-16.48%

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for HUTCHMED and NovoCure, as reported by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
HUTCHMED	1	2	1	1	2.40
NovoCure	1	3	4	0	2.38

HUTCHMED currently has a consensus price target of $16.88, suggesting a potential upside of 40.74%. NovoCure has a consensus price target of $27.29, suggesting a potential upside of 51.92%. Given NovoCure’s higher possible upside, analysts clearly believe NovoCure is more favorable than HUTCHMED.

Earnings and Valuation

This table compares HUTCHMED and NovoCure”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
HUTCHMED	$548.51 million	3.81	$456.91 million	N/A	N/A
NovoCure	$655.35 million	3.17	-$136.23 million	($1.53)	-11.74

HUTCHMED has higher earnings, but lower revenue than NovoCure.

Volatility and Risk

HUTCHMED has a beta of 0.31, indicating that its share price is 69% less volatile than the S&P 500. Comparatively, NovoCure has a beta of 0.9, indicating that its share price is 10% less volatile than the S&P 500.

Institutional & Insider Ownership

8.8% of HUTCHMED shares are held by institutional investors. Comparatively, 84.6% of NovoCure shares are held by institutional investors. 3.6% of HUTCHMED shares are held by insiders. Comparatively, 5.5% of NovoCure shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock is poised for long-term growth.

Summary

HUTCHMED beats NovoCure on 7 of the 13 factors compared between the two stocks.

About HUTCHMED

HUTCHMED (China) Ltd. is a holding company, which engages in the research and development, manufacture, and sale of pharmaceuticals and health-oriented consumer products. It operates through the Oncology/Immunology and Other Ventures segments. The Oncology/Immunology segment includes the discovery, development, and commercialization of targeted therapies and immunotherapies for the treatment of cancer and immunological diseases. The Other Ventures segment involves the other commercial businesses which include the sales, marketing, manufacture, and distribution of prescription drugs and healthcare products. The company was founded on December 18, 2000 and is headquartered in Hong Kong.

About NovoCure

NovoCure Limited, an oncology company, engages in the development, manufacture, and commercialization of tumor treating fields (TTFields) devices for the treatment of solid tumor cancers in the United States, Germany, Japan, Greater China, and internationally. The company’s TTFields devices include Optune Gio and Optune Lua. It also has ongoing clinical trials investigating TTFields in brain metastases, gastric cancer, glioblastoma, liver cancer, non-small cell lung cancer, pancreatic cancer, and ovarian cancer. NovoCure Limited was incorporated in 2000 and is headquartered in Saint Helier, Jersey.