Perrigo (NYSE:PRGO) & Bayer Aktiengesellschaft (OTCMKTS:BAYRY) Financial Analysis

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

Dividends

Perrigo pays an annual dividend of $1.16 per share and has a dividend yield of 7.4%. Bayer Aktiengesellschaft pays an annual dividend of $0.02 per share and has a dividend yield of 0.1%. Perrigo pays out -9.1% of its earnings in the form of a dividend. Bayer Aktiengesellschaft pays out -4.3% 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 raised its dividend for 23 consecutive years. Perrigo is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Profitability

This table compares Perrigo and Bayer Aktiengesellschaft’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Perrigo	-43.27%	12.39%	4.07%
Bayer Aktiengesellschaft	-3.28%	16.34%	4.33%

Earnings & Valuation

This table compares Perrigo and Bayer Aktiengesellschaft”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Perrigo	$4.25 billion	0.51	-$1.43 billion	($12.76)	-1.23
Bayer Aktiengesellschaft	$51.55 billion	1.17	-$4.10 billion	($0.46)	-33.33

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

Analyst Recommendations

This is a breakdown of recent ratings and recommmendations for Perrigo and Bayer Aktiengesellschaft, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Perrigo	2	3	1	0	1.83
Bayer Aktiengesellschaft	0	1	5	2	3.12

Perrigo presently has a consensus price target of $18.50, indicating a potential upside of 17.67%. Given Perrigo’s higher probable upside, research analysts plainly believe Perrigo is more favorable than Bayer Aktiengesellschaft.

Risk & Volatility

Perrigo has a beta of 0.71, suggesting that its share price is 29% less volatile than the S&P 500. Comparatively, Bayer Aktiengesellschaft has a beta of 0.57, suggesting that its share price is 43% less volatile than the S&P 500.

Institutional and Insider Ownership

95.9% of Perrigo shares are owned by institutional investors. 0.4% of Perrigo shares are owned by insiders. Strong institutional ownership is an indication that hedge funds, endowments and large money managers believe a stock will outperform the market over the long term.

About Perrigo

Perrigo Company plc provides over-the-counter health and wellness solutions to enhance individual well-being in the United States, Europe, and internationally. It operates through Consumer Self-Care Americas and Consumer Self-Care International segments. The company develops, manufactures, markets, and distributes self-care consumer products, such as upper respiratory products, including cough suppressants, expectorants, and sinus and allergy relief; nutrition products consisting of infant formulas and nutritional beverages; digestive health products, including antacids, anti-diarrheal, and anti-heartburn; pain and sleep-aids products comprising pain relievers and fever reducers; and oral care products, which include toothbrushes, toothbrush replacement heads, floss, flossers, whitening products, and toothbrush covers. It also offers healthy lifestyle products, such as smoking cessation, well-being, and weight management products; skin care products consisting of dermatological care, scar management, lice treatment, and other products for various skin conditions; women's health products comprising feminine hygiene and contraceptives; vitamins, minerals, and supplements; rare diseases business; and other miscellaneous self-care products. The company sells its products under the Compeed, Dr. Fresh, Firefly, Good Sense, Good Start, Mederma, Nasonex, Plackers, Prevacid24HR, REACH, Rembrandt, Steripod, Opill, Solpadeine, Coldrex, Physiomer, NiQuitin, ACO, ellaOne, Compeed Stops, XLS, Arterin, Davitamon, Apiserum, Abtei, and Nicorette brands. It also offers contract manufacturing services. The company sells its products through retail drug, supermarket, and mass merchandise chains; e-commerce stores; wholesalers; pharmacies; drug and grocery retailers; and para-pharmacies. The company was formerly known as Perrigo Company and changed its name to Perrigo Company plc in December 2013. Perrigo Company plc was founded in 1887 and is headquartered in Dublin, Ireland.

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.