Novartis vs Pfizer Which Is a Smarter Choice?

Novartis and Pfizer are two pharmaceutical giants with a long-standing rivalry in the stock market. Novartis, based in Switzerland, focuses on innovative medicines, while Pfizer, based in the United States, has a diverse portfolio including pharmaceuticals, consumer healthcare products, and vaccines. The competition between these two companies has often been closely watched by investors, as both firms are leaders in the healthcare industry. Understanding the key drivers and performance of Novartis and Pfizer stocks can provide valuable insights for investors seeking to capitalize on opportunities in the pharmaceutical sector.

Novartis or Pfizer?

When comparing Novartis and Pfizer, 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 Novartis and Pfizer.

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. Novartis has a dividend yield of 7.15%, while Pfizer has a dividend yield of 6.4%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Novartis reports a 5-year dividend growth of 5.40% year and a payout ratio of 43.31%. On the other hand, Pfizer reports a 5-year dividend growth of 4.08% year and a payout ratio of 221.76%.

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 Novartis P/E ratio at 12.08 and Pfizer's P/E ratio at 34.91. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Novartis P/B ratio is 4.91 while Pfizer's P/B ratio is 1.61.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Novartis has seen a 5-year revenue growth of -0.02%, while Pfizer's is 0.13%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Novartis's ROE at 41.08% and Pfizer's ROE at 4.72%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $105.48 for Novartis and $26.22 for Pfizer. Over the past year, Novartis's prices ranged from $92.35 to $120.92, with a yearly change of 30.94%. Pfizer's prices fluctuated between $25.20 and $31.54, with a yearly change of 25.16%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.