Amgen vs Novartis Which Performs Better?

Amgen and Novartis are two major players in the pharmaceutical industry, each with a significant presence in the global market. While both companies have seen considerable success over the years, there are distinct differences in their respective stock performances. Amgen, known for its focus on biotechnology, has shown strong growth in recent years, while Novartis, a more diversified pharmaceutical company, has faced some challenges. Investors looking to capitalize on the healthcare sector may find opportunities in both Amgen and Novartis stocks, but careful analysis is key to making informed decisions.

Amgen or Novartis?

When comparing Amgen and Novartis, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between Amgen and Novartis.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. Amgen has a dividend yield of 2.76%, while Novartis has a dividend yield of 7.15%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Amgen reports a 5-year dividend growth of 10.04% year and a payout ratio of 112.70%. On the other hand, Novartis reports a 5-year dividend growth of 5.40% year and a payout ratio of 43.31%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with Amgen P/E ratio at 40.85 and Novartis's P/E ratio at 12.08. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Amgen P/B ratio is 22.96 while Novartis's P/B ratio is 4.91.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Amgen has seen a 5-year revenue growth of 0.47%, while Novartis's is -0.02%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Amgen's ROE at 68.49% and Novartis's ROE at 41.08%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $321.61 for Amgen and $105.48 for Novartis. Over the past year, Amgen's prices ranged from $260.52 to $346.85, with a yearly change of 33.14%. Novartis's prices fluctuated between $92.35 and $120.92, with a yearly change of 30.94%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.