Novartis vs Sandoz Which Is Superior?

Novartis and Sandoz are two leading pharmaceutical companies that operate globally. Novartis specializes in cutting-edge research and development of innovative drugs, while Sandoz is a major player in the production of generic medications. Both companies are publicly traded on the stock market, offering investors the opportunity to capitalize on the ever-growing healthcare industry. Understanding the differences in their business models, market positions, and financial performance can provide valuable insights for investors looking to make informed decisions in the pharmaceutical sector.

Novartis or Sandoz?

When comparing Novartis and Sandoz, 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 Sandoz.

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 7.68%, while Sandoz has a dividend yield of 0.81%. 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, Sandoz reports a 5-year dividend growth of 0.00% year and a payout ratio of 0.00%.

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 11.24 and Sandoz's P/E ratio at 207.07. 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 4.57 while Sandoz's P/B ratio is 1.84.

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 Sandoz's is 0.11%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Novartis's ROE at 41.08% and Sandoz's ROE at 1.78%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $97.87 for Novartis and $41.44 for Sandoz. Over the past year, Novartis's prices ranged from $92.35 to $120.92, with a yearly change of 30.94%. Sandoz's prices fluctuated between $27.79 and $46.80, with a yearly change of 68.41%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.