Head-To-Head Analysis: Merck & Co., Inc. (NYSE:MRK) versus Cadence Pharmaceuticals (CADX)

Merck & Co., Inc. (NYSE: MRK) and Cadence Pharmaceuticals (NASDAQ:CADX) are both healthcare companies, but which is the better investment? We will contrast the two companies based on the strength of their valuation, analyst recommendations, profitability, dividends, earnings, risk and institutional ownership.

Profitability

This table compares Merck & Co., Inc. and Cadence Pharmaceuticals’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Merck & Co., Inc. -0.49% -0.58% -0.22%
Cadence Pharmaceuticals N/A N/A N/A

Institutional and Insider Ownership

73.6% of Merck & Co., Inc. shares are held by institutional investors. 0.3% of Merck & Co., Inc. shares are held by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Valuation and Earnings

This table compares Merck & Co., Inc. and Cadence Pharmaceuticals’ top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Merck & Co., Inc. $39.81 billion 3.94 $3.92 billion $1.03 55.92
Cadence Pharmaceuticals N/A N/A N/A N/A N/A

Merck & Co., Inc. has higher revenue and earnings than Cadence Pharmaceuticals.

Analyst Recommendations

This is a breakdown of current ratings for Merck & Co., Inc. and Cadence Pharmaceuticals, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Merck & Co., Inc. 1 8 9 0 2.44
Cadence Pharmaceuticals 0 0 0 0 N/A

Merck & Co., Inc. presently has a consensus price target of $66.00, indicating a potential upside of 14.58%.

Dividends

Merck & Co., Inc. pays an annual dividend of $1.92 per share and has a dividend yield of 3.3%. Cadence Pharmaceuticals does not pay a dividend. Merck & Co., Inc. pays out 186.4% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Merck & Co., Inc. has increased its dividend for 6 consecutive years.

Summary

Merck & Co., Inc. beats Cadence Pharmaceuticals on 6 of the 10 factors compared between the two stocks.

Merck & Co., Inc. Company Profile

Merck & Co., Inc. is a global healthcare company. The Company offers health solutions through its prescription medicines, vaccines, biologic therapies and animal health products. It operates through four segments: Pharmaceutical, Animal Health, Healthcare Services and Alliances. The Company’s Pharmaceutical segment includes human health pharmaceutical and vaccine products marketed either directly by the Company or through joint ventures. Human health pharmaceutical products consist of therapeutic and preventive agents, generally sold by prescription, for the treatment of human disorders. The Company sells its human health pharmaceutical products primarily to drug wholesalers and retailers, hospitals, government agencies and managed healthcare providers, such as health maintenance organizations, pharmacy benefit managers and other institutions. Vaccine products consist of preventive pediatric, adolescent and adult vaccines, primarily administered at physician offices.

Cadence Pharmaceuticals Company Profile

Cadence Pharmaceuticals, Inc. (Cadence) is a biopharmaceutical company focused on acquiring, in-licensing, developing and commercializing products principally for use in the hospital setting. The Company has rights to one product, OFIRMEV (acetaminophen) injection, an intravenous (IV), formulation of acetaminophen. The Company in-licensed the United States, and Canadian rights to OFIRMEV from Bristol-Myers Squibb Company (BMS), which sells intravenous acetaminophen in Europe and other markets for the treatment of acute pain and fever under the brand name Perfalgan. In March 2014, Mallinckrodt Plc acquired Cadence Pharmaceuticals, Inc. In March 2014, Mallinckrodt Plc completed the acquisition of Cadence Pharmaceuticals.

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