AstraZeneca vs Merck & Co Which Is a Smarter Choice?

AstraZeneca and Merck & Co are two major pharmaceutical companies that are frequently compared by investors. AstraZeneca is a UK-based company known for its strong pipeline of innovative drugs and strategic partnerships. Merck & Co, on the other hand, is a US-based company with a diverse portfolio of pharmaceutical products and a strong track record of revenue growth. Both companies face competition in the crowded pharmaceutical market, and their stock performances are closely watched by investors for indicators of future growth and profitability.

AstraZeneca or Merck & Co?

When comparing AstraZeneca and Merck & Co, 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 AstraZeneca and Merck & Co.

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. AstraZeneca has a dividend yield of 2.22%, while Merck & Co has a dividend yield of 2.26%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. AstraZeneca reports a 5-year dividend growth of 0.42% year and a payout ratio of 71.25%. On the other hand, Merck & Co reports a 5-year dividend growth of 8.26% year and a payout ratio of 63.72%.

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 AstraZeneca P/E ratio at 31.78 and Merck & Co's P/E ratio at 21.26. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. AstraZeneca P/B ratio is 5.07 while Merck & Co's P/B ratio is 5.80.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, AstraZeneca has seen a 5-year revenue growth of 0.70%, while Merck & Co's is 0.41%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with AstraZeneca's ROE at 16.57% and Merck & Co's ROE at 29.27%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $66.14 for AstraZeneca and $100.53 for Merck & Co. Over the past year, AstraZeneca's prices ranged from $60.47 to $87.68, with a yearly change of 45.00%. Merck & Co's prices fluctuated between $94.48 and $134.63, with a yearly change of 42.50%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.