Reviewing Theravance Biopharma (TBPH) and Novartis AG (NVS)

Theravance Biopharma (NASDAQ: TBPH) and Novartis AG (NYSE:NVS) are both medical companies, but which is the better business? We will compare the two companies based on the strength of their dividends, risk, institutional ownership, profitability, valuation, earnings and analyst recommendations.

Profitability

This table compares Theravance Biopharma and Novartis AG’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Theravance Biopharma -742.59% -78.74% -43.79%
Novartis AG 13.73% 15.77% 8.46%

Dividends

Novartis AG pays an annual dividend of $2.30 per share and has a dividend yield of 2.8%. Theravance Biopharma does not pay a dividend. Novartis AG pays out 81.9% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future.

Insider and Institutional Ownership

84.9% of Theravance Biopharma shares are owned by institutional investors. Comparatively, 10.9% of Novartis AG shares are owned by institutional investors. 6.1% of Theravance Biopharma shares are owned by insiders. Comparatively, 0.0% of Novartis AG shares are owned by insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Volatility & Risk

Theravance Biopharma has a beta of 2.15, indicating that its share price is 115% more volatile than the S&P 500. Comparatively, Novartis AG has a beta of 0.72, indicating that its share price is 28% less volatile than the S&P 500.

Analyst Recommendations

This is a summary of recent ratings for Theravance Biopharma and Novartis AG, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Theravance Biopharma 1 0 5 0 2.67
Novartis AG 3 6 4 0 2.08

Theravance Biopharma currently has a consensus target price of $42.67, indicating a potential upside of 45.92%. Given Theravance Biopharma’s stronger consensus rating and higher possible upside, analysts plainly believe Theravance Biopharma is more favorable than Novartis AG.

Earnings and Valuation

This table compares Theravance Biopharma and Novartis AG’s revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio NetIncome Earnings Per Share Price/Earnings Ratio
Theravance Biopharma $48.65 million 32.35 -$190.66 million ($4.63) -6.32
Novartis AG $48.52 billion 4.04 $6.71 billion $2.81 29.46

Novartis AG has higher revenue and earnings than Theravance Biopharma. Theravance Biopharma is trading at a lower price-to-earnings ratio than Novartis AG, indicating that it is currently the more affordable of the two stocks.

Summary

Theravance Biopharma beats Novartis AG on 8 of the 15 factors compared between the two stocks.

About Theravance Biopharma

Theravance Biopharma, Inc. is a biopharmaceutical company. The Company is engaged in creating medicines for patients suffering from serious illness. The Company operates in the segment of discovery (research), development and commercialization of human therapeutics. The Company’s pipeline of internally discovered product candidates includes medicines to address the unmet needs of patients being treated for serious conditions primarily in the acute care setting. Its commercial product VIBATIV (telavancin) is a once-daily dual-mechanism antibiotic approved in the United States and Europe for certain difficult-to-treat infections. Its Revefenacin (TD-4208) is a long-acting muscarinic antagonist (LAMA) being developed as a nebulized treatment for chronic obstructive pulmonary disease. Its neprilysin (NEP) inhibitor program is designed to develop selective NEP inhibitors for the treatment of a range of cardiovascular and renal diseases.

About Novartis AG

Novartis AG is a holding company, which provides healthcare solutions. The Company is engaged in the research, development, manufacturing and marketing of a range of healthcare products led by pharmaceuticals. The Company’s segments include Innovative Medicines, Sandoz, Alcon and Corporate activities. Innovative Medicines researches, develops, manufactures, distributes and sells patented prescription medicines to develop health outcomes for patients and healthcare providers. Sandoz develops, manufactures, distributes and sells prescription medicines, as well as pharmaceutical active substances that are not protected by valid and enforceable third-party patents. Alcon researches, develops, manufactures, distributes and sells eye care products. Alcon is a provider of eye care with product offerings in eye care devices and vision care. The Company’s range of products includes pharmaceuticals and oncology medicines, generic and biosimilar medicines, and eye care devices.

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