Reviewing Perrigo (NYSE:PRGO) & GSK (NYSE:GSK)

Perrigo (NYSE:PRGO) and GSK (NYSE:GSK) are both healthcare companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, earnings, valuation, dividends, institutional ownership, profitability and risk.

Profitability

This table compares Perrigo and GSK’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Perrigo	-41.85%	11.25%	4.08%
GSK	14.56%	43.23%	11.60%

Analyst Recommendations

This is a summary of recent ratings and price targets for Perrigo and GSK, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Perrigo	1	4	1	0	2.00
GSK	3	13	3	0	2.00

Perrigo presently has a consensus price target of $17.50, suggesting a potential upside of 9.65%. GSK has a consensus price target of $55.48, suggesting a potential upside of 13.89%. Given GSK’s higher possible upside, analysts clearly believe GSK is more favorable than Perrigo.

Valuation and Earnings

This table compares Perrigo and GSK”s top-line revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Perrigo	$4.25 billion	0.52	-$1.43 billion	($12.51)	-1.28
GSK	$43.07 billion	2.29	$7.54 billion	$3.20	15.22

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

Volatility & Risk

Perrigo has a beta of 0.69, indicating that its stock price is 31% less volatile than the S&P 500. Comparatively, GSK has a beta of 0.33, indicating that its stock price is 67% less volatile than the S&P 500.

Dividends

Perrigo pays an annual dividend of $1.16 per share and has a dividend yield of 7.3%. GSK pays an annual dividend of $1.77 per share and has a dividend yield of 3.6%. Perrigo pays out -9.3% of its earnings in the form of a dividend. GSK pays out 55.3% 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. Perrigo has increased its dividend for 23 consecutive years. Perrigo is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Insider & Institutional Ownership

95.9% of Perrigo shares are held by institutional investors. Comparatively, 15.7% of GSK shares are held by institutional investors. 0.4% of Perrigo shares are held by insiders. Comparatively, 10.0% of GSK shares are held 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.

Summary

GSK beats Perrigo on 11 of the 16 factors compared between the two stocks.

About Perrigo

Perrigo Company plc provides over-the-counter health and wellness solutions to enhance individual well-being in the United States, Europe, and internationally. It operates through Consumer Self-Care Americas and Consumer Self-Care International segments. The company develops, manufactures, markets, and distributes self-care consumer products, such as upper respiratory products, including cough suppressants, expectorants, and sinus and allergy relief; nutrition products consisting of infant formulas and nutritional beverages; digestive health products, including antacids, anti-diarrheal, and anti-heartburn; pain and sleep-aids products comprising pain relievers and fever reducers; and oral care products, which include toothbrushes, toothbrush replacement heads, floss, flossers, whitening products, and toothbrush covers. It also offers healthy lifestyle products, such as smoking cessation, well-being, and weight management products; skin care products consisting of dermatological care, scar management, lice treatment, and other products for various skin conditions; women's health products comprising feminine hygiene and contraceptives; vitamins, minerals, and supplements; rare diseases business; and other miscellaneous self-care products. The company sells its products under the Compeed, Dr. Fresh, Firefly, Good Sense, Good Start, Mederma, Nasonex, Plackers, Prevacid24HR, REACH, Rembrandt, Steripod, Opill, Solpadeine, Coldrex, Physiomer, NiQuitin, ACO, ellaOne, Compeed Stops, XLS, Arterin, Davitamon, Apiserum, Abtei, and Nicorette brands. It also offers contract manufacturing services. The company sells its products through retail drug, supermarket, and mass merchandise chains; e-commerce stores; wholesalers; pharmacies; drug and grocery retailers; and para-pharmacies. The company was formerly known as Perrigo Company and changed its name to Perrigo Company plc in December 2013. Perrigo Company plc was founded in 1887 and is headquartered in Dublin, Ireland.

About GSK

GSK plc, together with its subsidiaries, engages in the research, development, and manufacture of vaccines, and specialty and general medicines to prevent and treat disease in the United Kingdom, the United States, and internationally. It operates through two segments, Commercial Operations and Total R&D. The company offers shingles, meningitis, respiratory syncytial virus, flu, polio, influenza, and pandemic vaccines. It also provides medicines for HIV, oncology, respiratory/immunology, and other specialty medicine products, as well as inhaled medicines for asthma and chronic obstructive pulmonary disease, and antibiotics for infections. It has a collaboration agreement with CureVac to develop mRNA-based influenza vaccines, and with Wave Life Sciences and Elsie Biotechnologies, Inc for oligonucleotide platform development. The company was formerly known as GlaxoSmithKline plc and changed its name to GSK plc in May 2022. GSK plc was founded in 1715 and is headquartered in Brentford, the United Kingdom.