Gilead Sciences vs Merck & Co Which Outperforms?

Gilead Sciences and Merck & Co are two leading pharmaceutical companies that have long been competing in the healthcare sector. Both companies have a strong presence in the development and commercialization of innovative drugs and therapies for various diseases. Investors often compare the performance of their stocks to assess their financial health and growth potential. Gilead Sciences is known for its successful antiviral medications, while Merck & Co has a diverse portfolio of drugs in various therapeutic areas. This comparison examines the strengths and weaknesses of these two companies in the stock market.

Gilead Sciences or Merck & Co?

When comparing Gilead Sciences 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 Gilead Sciences 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. Gilead Sciences has a dividend yield of 3.31%, while Merck & Co has a dividend yield of 3.04%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Gilead Sciences reports a 5-year dividend growth of 5.64% year and a payout ratio of 3862.70%. 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 Gilead Sciences P/E ratio at 914.27 and Merck & Co's P/E ratio at 21.10. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Gilead Sciences P/B ratio is 6.24 while Merck & Co's P/B ratio is 5.76.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Gilead Sciences has seen a 5-year revenue growth of 0.27%, while Merck & Co's is 0.41%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Gilead Sciences's ROE at 0.65% 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 $91.44 for Gilead Sciences and $100.12 for Merck & Co. Over the past year, Gilead Sciences's prices ranged from $62.07 to $98.90, with a yearly change of 59.34%. 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.