Critical Comparison: Johnson & Johnson (NYSE:JNJ) vs. Amphastar Pharmaceuticals (NASDAQ:AMPH)

Johnson & Johnson (NYSE:JNJ) and Amphastar Pharmaceuticals (NASDAQ:AMPH) are both healthcare companies, but which is the superior business? We will contrast the two companies based on the strength of their dividends, profitability, earnings, analyst recommendations, institutional ownership, risk and valuation.

Analyst Ratings

This is a summary of recent recommendations for Johnson & Johnson and Amphastar Pharmaceuticals, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Johnson & Johnson	0	8	17	1	2.73
Amphastar Pharmaceuticals	1	7	0	0	1.88

Johnson & Johnson currently has a consensus target price of $275.92, suggesting a potential downside of 0.57%. Amphastar Pharmaceuticals has a consensus target price of $23.33, suggesting a potential downside of 19.11%. Given Johnson & Johnson’s stronger consensus rating and higher possible upside, research analysts plainly believe Johnson & Johnson is more favorable than Amphastar Pharmaceuticals.

Earnings and Valuation

This table compares Johnson & Johnson and Amphastar Pharmaceuticals”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Johnson & Johnson	$94.19 billion	7.09	$26.80 billion	$6.60	42.05
Amphastar Pharmaceuticals	$745.79 million	1.65	$98.09 million	$2.19	13.17

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

Insider and Institutional Ownership

69.6% of Johnson & Johnson shares are held by institutional investors. Comparatively, 65.1% of Amphastar Pharmaceuticals shares are held by institutional investors. 0.2% of Johnson & Johnson shares are held by insiders. Comparatively, 29.6% of Amphastar Pharmaceuticals shares are held by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Risk and Volatility

Johnson & Johnson has a beta of 0.22, indicating that its share price is 78% less volatile than the S&P 500. Comparatively, Amphastar Pharmaceuticals has a beta of 0.93, indicating that its share price is 7% less volatile than the S&P 500.

Profitability

This table compares Johnson & Johnson and Amphastar Pharmaceuticals’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Johnson & Johnson	16.20%	31.64%	13.04%
Amphastar Pharmaceuticals	13.27%	15.31%	7.15%

Summary

Johnson & Johnson beats Amphastar Pharmaceuticals on 13 of the 15 factors compared between the two stocks.

About Johnson & Johnson

Johnson & Johnson is a global healthcare company that develops and sells prescription medicines and medical technologies. Its business is organized around two segments: Innovative Medicine and MedTech. Innovative Medicine develops treatments in areas including oncology, immunology, neuroscience, cardiovascular and metabolic disease, and pulmonary hypertension. MedTech provides products and technologies for fields such as surgery, orthopedics, and vision care. Founded in 1886, Johnson & Johnson serves patients and healthcare professionals in markets around the world.

About Amphastar Pharmaceuticals

Amphastar Pharmaceuticals is a biopharmaceutical company that develops, manufactures and markets generic and proprietary medicines, with a focus on products that can be technically challenging to produce. Its offerings include injectable, inhalation and intranasal medicines, as well as insulin active pharmaceutical ingredients. The company’s products include treatments and emergency medicines such as enoxaparin, glucagon and epinephrine products. Amphastar also markets BAQSIMI, a nasal powder used to treat severe low blood sugar, and Primatene MIST, an over-the-counter asthma inhaler.