Comparing Aurinia Pharmaceuticals (NASDAQ:AUPH) and Merck KGaA (OTCMKTS:MKKGY)
by Jessica Moore · The Cerbat GemAurinia Pharmaceuticals (NASDAQ:AUPH – Get Free Report) and Merck KGaA (OTCMKTS:MKKGY – Get Free Report) are both medical companies, but which is the superior stock? We will compare the two businesses based on the strength of their institutional ownership, risk, earnings, dividends, valuation, profitability and analyst recommendations.
Analyst Recommendations
This is a summary of current ratings and recommmendations for Aurinia Pharmaceuticals and Merck KGaA, as provided by MarketBeat.
| Sell Ratings | Hold Ratings | Buy Ratings | Strong Buy Ratings | Rating Score | |
| Aurinia Pharmaceuticals | 0 | 4 | 2 | 0 | 2.33 |
| Merck KGaA | 0 | 2 | 0 | 0 | 2.00 |
Aurinia Pharmaceuticals presently has a consensus target price of $17.25, suggesting a potential upside of 17.75%. Given Aurinia Pharmaceuticals’ stronger consensus rating and higher possible upside, equities analysts clearly believe Aurinia Pharmaceuticals is more favorable than Merck KGaA.
Volatility and Risk
Aurinia Pharmaceuticals has a beta of 1.46, indicating that its share price is 46% more volatile than the S&P 500. Comparatively, Merck KGaA has a beta of 0.95, indicating that its share price is 5% less volatile than the S&P 500.
Valuation & Earnings
This table compares Aurinia Pharmaceuticals and Merck KGaA”s gross revenue, earnings per share (EPS) and valuation.
| Gross Revenue | Price/Sales Ratio | Net Income | Earnings Per Share | Price/Earnings Ratio | |
| Aurinia Pharmaceuticals | $235.13 million | 8.21 | $5.75 million | $0.56 | 26.16 |
| Merck KGaA | $22.57 billion | 0.87 | $3.00 billion | $2.51 | 12.08 |
Merck KGaA has higher revenue and earnings than Aurinia Pharmaceuticals. Merck KGaA is trading at a lower price-to-earnings ratio than Aurinia Pharmaceuticals, indicating that it is currently the more affordable of the two stocks.
Insider & Institutional Ownership
36.8% of Aurinia Pharmaceuticals shares are held by institutional investors. Comparatively, 0.1% of Merck KGaA shares are held by institutional investors. 12.2% of Aurinia Pharmaceuticals shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock will outperform the market over the long term.
Profitability
This table compares Aurinia Pharmaceuticals and Merck KGaA’s net margins, return on equity and return on assets.
| Net Margins | Return on Equity | Return on Assets | |
| Aurinia Pharmaceuticals | 29.28% | 25.19% | 17.25% |
| Merck KGaA | 13.92% | 10.07% | 5.92% |
Summary
Aurinia Pharmaceuticals beats Merck KGaA on 11 of the 14 factors compared between the two stocks.
About Aurinia Pharmaceuticals
Aurinia Pharmaceuticals Inc., a commercial-stage biopharmaceutical company, focuses on developing and commercializing therapies to treat various diseases with unmet medical need in the United States. It offers LUPKYNIS for the treatment of adult patients with active lupus nephritis. It has a collaboration and license agreement with Otsuka Pharmaceutical Co., Ltd. The company was incorporated in 1993 and is headquartered in Edmonton, Canada.
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.