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Johnson & Johnson (JNJ) vs Merck & Co., Inc. (MRK)

Johnson & Johnson and Merck & Co., Inc. are both Drug Manufacturers General companies. Johnson & Johnson is the larger, with a market value of $610.4B against $358.2B — 1.7× the size. Johnson & Johnson trades at the lower P/E: 29.6× against 117×. Johnson & Johnson grew revenue faster over the last twelve months: 7.80% against 4.64%. Johnson & Johnson has the higher net margin (16.2% vs 4.77%) and the lower return on invested capital (0.00% vs 5.08%). Both pay a dividend; Merck & Co., Inc. yields more (2.33% vs 2.07%). Across the 23 metrics below, Merck & Co., Inc. leads on 13 and Johnson & Johnson on 10.

Valuation

Metric JNJ MRK Drug Manufacturers General median
P/E 29.61 116.76 24.54
P/S 6.19 5.42 3.39
P/B 7.24 8.59 5.00
Price to free cash flow 27.07 22.44 16.55
EV/EBITDA 18.12 29.52 13.82
EV/Sales 6.36 6.08 4.03
Earnings yield 3.38% 0.86% 2.98%
Free cash flow yield 3.69% 4.46% 4.46%

Profitability

Metric JNJ MRK Drug Manufacturers General median
Gross margin 67.56% 72.97% 72.77%
Operating margin 19.29% 10.49% 18.77%
Net margin 16.20% 4.77% 8.27%
Free cash flow margin 0.00% 24.13% 17.18%
Return on equity 0.00% 6.97% 5.87%
Return on assets 0.00% 2.57% 2.57%
Return on invested capital 0.00% 5.08% 6.11%

Growth

Metric JNJ MRK Drug Manufacturers General median
Revenue growth (TTM) 7.80% 4.64% 6.66%
EPS growth (last fiscal year) 90.50% 8.01% 21.81%
Revenue growth, 5-year CAGR 2.67% 9.38% 4.75%
Net income growth, 5-year CAGR 12.74% 20.90% 0.00%

Health

Metric JNJ MRK Drug Manufacturers General median
Debt to equity 0.44 1.22 0.63
Current ratio 1.09 1.32 1.32
Net debt to EBITDA 0.46 1.15 1.15

Dividend

Metric JNJ MRK Drug Manufacturers General median
Dividend yield 2.07% 2.33% 2.33%
Payout ratio 0.80 2.72 0.59

Size

Metric JNJ MRK Drug Manufacturers General median
Market cap 610.38b 358.21b 123.73b

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