AstraZeneca vs Novartis Which Is More Reliable?

AstraZeneca and Novartis are two prominent pharmaceutical companies often compared in terms of their stocks. AstraZeneca, a British-Swedish multinational company, is known for its focus on respiratory, cardiovascular, and oncology treatments. Novartis, a Swiss multinational company, is recognized for its strong presence in the pharmaceutical, eye care, and generic drug markets. Investors closely monitor the performance of both companies to assess their growth potential, market competitiveness, and financial stability in the healthcare industry.

AstraZeneca or Novartis?

When comparing AstraZeneca 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 AstraZeneca 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. AstraZeneca has a dividend yield of 2.2%, while Novartis has a dividend yield of 7.66%. 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, 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 AstraZeneca P/E ratio at 31.95 and Novartis's P/E ratio at 11.27. 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 5.10 while Novartis's P/B ratio is 4.58.

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 Novartis's is -0.02%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with AstraZeneca's ROE at 16.57% and Novartis's ROE at 41.08%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $66.92 for AstraZeneca and $98.56 for Novartis. Over the past year, AstraZeneca's prices ranged from $60.47 to $87.68, with a yearly change of 45.00%. 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.