Head to Head Review: Shionogi & Co., Ltd. Unsponsored ADR (OTCMKTS:SGIOY) and Merck KGaA (OTCMKTS:MKKGY)

Merck KGaA (OTCMKTS:MKKGY) and Shionogi & Co., Ltd. Unsponsored ADR (OTCMKTS:SGIOY) are both large-cap healthcare companies, but which is the better stock? We will contrast the two companies based on the strength of their analyst recommendations, institutional ownership, earnings, valuation, profitability, risk and dividends.

Dividends

Merck KGaA pays an annual dividend of $0.35 per share and has a dividend yield of 1.1%. Shionogi & Co., Ltd. Unsponsored ADR pays an annual dividend of $0.14 per share and has a dividend yield of 1.6%. Merck KGaA pays out 18.0% of its earnings in the form of a dividend. Shionogi & Co., Ltd. Unsponsored ADR pays out 14.0% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Shionogi & Co., Ltd. Unsponsored ADR is clearly the better dividend stock, given its higher yield and lower payout ratio.

Earnings and Valuation

This table compares Merck KGaA and Shionogi & Co., Ltd. Unsponsored ADR”s gross revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Merck KGaA	$23.87 billion	0.85	$2.95 billion	$1.94	16.26
Shionogi & Co., Ltd. Unsponsored ADR	$3.32 billion	4.52	$1.35 billion	$1.00	8.81

Merck KGaA has higher revenue and earnings than Shionogi & Co., Ltd. Unsponsored ADR. Shionogi & Co., Ltd. Unsponsored ADR is trading at a lower price-to-earnings ratio than Merck KGaA, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Merck KGaA and Shionogi & Co., Ltd. Unsponsored ADR’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Merck KGaA	11.20%	8.10%	4.58%
Shionogi & Co., Ltd. Unsponsored ADR	46.67%	16.13%	12.09%

Risk & Volatility

Merck KGaA has a beta of 0.95, meaning that its stock price is 5% less volatile than the S&P 500. Comparatively, Shionogi & Co., Ltd. Unsponsored ADR has a beta of 0.08, meaning that its stock price is 92% less volatile than the S&P 500.

Analyst Recommendations

This is a breakdown of recent recommendations for Merck KGaA and Shionogi & Co., Ltd. Unsponsored ADR, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Merck KGaA	1	5	0	0	1.83
Shionogi & Co., Ltd. Unsponsored ADR	0	1	0	2	3.33

Insider and Institutional Ownership

0.1% of Merck KGaA shares are owned by institutional investors. Comparatively, 1.9% of Shionogi & Co., Ltd. Unsponsored ADR shares are owned by institutional investors. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Summary

Shionogi & Co., Ltd. Unsponsored ADR beats Merck KGaA on 9 of the 14 factors compared between the two stocks.

About Merck KGaA

Merck KGaA operates as a science and technology company in Germany. It operates through Life Science, Healthcare, and Electronics segments. The company’s Life Science segment offers tools, chemicals, and equipment for academic labs, biotech, and pharmaceutical manufacturers, as well as industrial sector. This segment provides drug manufacturers with process development expertise and technologies, such as continuous bioprocessing; testing kits and services; reagents and services; testing solutions that analyze air, water, and soil; and testing and tools, as well as products that help test nutritional value and identify quality inconsistencies. Its Healthcare segment discovers, develops, manufacturers, and markets prescription drugs and biopharmaceuticals for the treatment of oncology, neurology and immunology, fertility, endocrinology, as well as cardiovascular, diabetes, thyroid disorders, and multiple sclerosis; general medicines; and injection device and disease monitoring software. The Electronics segment supplies materials for the semiconductor and display industries and surface design, such as delivery systems and services, as well as surface solutions, including cosmetics, effect pigments, and functional solutions. In addition, it has in-licensing agreement with Debiopharm International SA for developing and commercializing drug candidates for the treatment of head and neck cancer; Jiangsu Hengrui Pharmaceuticals Co. Ltd. for developing, manufacturing, and commercializing drug candidates for the treatment of metastatic colorectal cancer; and Abbisko Therapeutics Co. Ltd. for developing and commercializing of drug candidates for the treatment of tenosynovial giant cell tumor, as well as license and collaboration agreement with Merck KGaA to discover two targeted protein degraders against critical oncogenic proteins. The company was founded in 1668 and is headquartered in Darmstadt, Germany. Merck KGaA operates as a subsidiary of E. Merck KGaA.

About Shionogi & Co., Ltd. Unsponsored ADR

Shionogi & Co., Ltd. engages in the research, development, manufacture, and distribution of pharmaceuticals, diagnostic reagents, and medical devices in Japan. It offers Fetroja, a multidrug-resistant for gram-negative bacterial infection treatment; Cabenuva and Apretude an anti-HIV and HIV prophylactic drug; Xocova an oral COVID-19 treatment drug; Finibax a carbapenem antibiotic; Xofluza, an influenza antiviral drug; and Tivicay, an anti-HIV drug. It also develops S-872600 an influenza nasal vaccine; S-875670 anCOVID-19 nasal vaccine; S-540956 a nucleic acid adjuvant; S-554110 a nontuberculous mycobacterial infection; S-337395 for RSV infections; S-892216 for COVID-19 therapeutics; Olorofim for invasive aspergillosis; cefiderocol for aerobic gram-negative bacterial infections and infectious diseases; S-268019 a COVID-19 prophylactic vaccine; S-268019 a prophylactic vaccine for COVID-19; ensitrelvir for COVID-19 treatment and prevention; baloxavir for influenza virus infection; S-365598 for HIV infection; and S-555739 for suppressing aggravation of COVID-19. In addition, the company develops S-540956 for nucleic acid adjuvant; S-109802 for post-stroke spasticity; S-151128 for chronic pain; S-588210 and S-531011 for solid tumor; S-309309 for obesity; BPN14770 for Alzheimer’s disease and fragile X syndrome; S-588410 for bladder cancer; S-488210 for head and neck squamous cell carcinoma; S-005151 for Acute ischemic stroke and epidermolysis bullosa; Rizmoic for opioid-induced constipation; ADR-001 for decompensated liver cirrhosis; S-222611 for malignant tumor; S-812217 for depression; GRT7039 for pain associated with osteoarthritis of the knee; SDT-001 for inattentive ADHD; S-588410 for esophageal cancer; SR-0379 for cutaneous ulcer; and S-723595 for type 2 diabetes. The company was formerly known as Shionogi Shoten Co., Ltd. and changed its name to Shionogi & Co., Ltd. in 1943. Shionogi & Co., Ltd. was founded in 1878 and is headquartered in Osaka, Japan.