Head-To-Head Review: Amgen (AMGN) and Bristol-Myers Squibb (BMY)

Amgen (NASDAQ: AMGN) and Bristol-Myers Squibb (NYSE:BMY) are both large-cap healthcare companies, but which is the better investment? We will compare the two companies based on the strength of their earnings, valuation, institutional ownership, risk, profitability, analyst recommendations and dividends.

Profitability

This table compares Amgen and Bristol-Myers Squibb’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Amgen 8.66% 30.87% 11.64%
Bristol-Myers Squibb 4.85% 35.43% 14.85%

Insider & Institutional Ownership

78.0% of Amgen shares are owned by institutional investors. Comparatively, 69.8% of Bristol-Myers Squibb shares are owned by institutional investors. 0.2% of Amgen shares are owned by insiders. Comparatively, 0.2% of Bristol-Myers Squibb shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Dividends

Amgen pays an annual dividend of $5.28 per share and has a dividend yield of 2.8%. Bristol-Myers Squibb pays an annual dividend of $1.60 per share and has a dividend yield of 2.4%. Amgen pays out 48.0% of its earnings in the form of a dividend. Bristol-Myers Squibb pays out 67.8% 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. Amgen has increased its dividend for 7 consecutive years and Bristol-Myers Squibb has increased its dividend for 8 consecutive years. Amgen is clearly the better dividend stock, given its higher yield and lower payout ratio.

Risk & Volatility

Amgen has a beta of 1.42, meaning that its share price is 42% more volatile than the S&P 500. Comparatively, Bristol-Myers Squibb has a beta of 1.08, meaning that its share price is 8% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for Amgen and Bristol-Myers Squibb, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Amgen 0 12 10 0 2.45
Bristol-Myers Squibb 1 7 7 0 2.40

Amgen presently has a consensus target price of $192.45, suggesting a potential upside of 3.10%. Bristol-Myers Squibb has a consensus target price of $66.00, suggesting a potential downside of 2.87%. Given Amgen’s stronger consensus rating and higher possible upside, equities research analysts clearly believe Amgen is more favorable than Bristol-Myers Squibb.

Valuation and Earnings

This table compares Amgen and Bristol-Myers Squibb’s top-line revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Amgen $22.85 billion 5.89 $1.98 billion $11.00 16.97
Bristol-Myers Squibb $20.78 billion 5.34 $1.01 billion $2.36 28.79

Amgen has higher revenue and earnings than Bristol-Myers Squibb. Amgen is trading at a lower price-to-earnings ratio than Bristol-Myers Squibb, indicating that it is currently the more affordable of the two stocks.

Summary

Amgen beats Bristol-Myers Squibb on 12 of the 17 factors compared between the two stocks.

Amgen Company Profile

Amgen Inc. is a biotechnology company. The Company discovers, develops, manufactures and delivers various human therapeutics. It operates in human therapeutics segment. Its marketed products portfolio includes Neulasta (pegfilgrastim); erythropoiesis-stimulating agents (ESAs), such as Aranesp (darbepoetin alfa) and EPOGEN (epoetin alfa); Sensipar/Mimpara (cinacalcet); XGEVA (denosumab); Prolia (denosumab); NEUPOGEN (filgrastim), and other marketed products, such as KYPROLIS (carfilzomib), Vectibix (panitumumab), Nplate (romiplostim), Repatha (evolocumab), BLINCYTO (blinatumomab), IMLYGIC (talimogene laherparepvec) and Corlanor (ivabradine). It focuses on human therapeutics for the treatment of serious illness in the areas of oncology/hematology, cardiovascular disease and neuroscience. Its product candidates in Phase III include Erenumab for episodic migraine, Aranesp for myelodysplastic syndromes, BLINCYTO for acute lymphoblastic leukemia and IMLYGIC for metastatic melanoma.

Bristol-Myers Squibb Company Profile

Bristol-Myers Squibb Company is engaged in the discovery, development, licensing, manufacturing, marketing, distribution and sale of biopharmaceutical products. The Company’s pharmaceutical products include chemically synthesized drugs, or small molecules, and products produced from biological processes called biologics. Small molecule drugs are administered orally in the form of a pill or tablet. Biologics are administered to patients through injections or by infusion. The Company’s products include Empliciti, Opdivo, Sprycel, Yervoy, Eliquis, Orencia, Baraclude, Hepatitis C Franchise, Reyataz Franchise and Sustiva Franchise. It offers products for a range of therapeutic classes, which include virology, including human immunodeficiency virus (HIV) infection; oncology; immunoscience, and cardiovascular. Its products are sold to wholesalers, retail pharmacies, hospitals, government entities and the medical profession across the world.

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