Financial Analysis: Novo Nordisk A/S (NYSE:NVO) versus Amarin (NASDAQ:AMRN)

Amarin (NASDAQ:AMRN) and Novo Nordisk A/S (NYSE:NVO) are both healthcare companies, but which is the superior stock? We will compare the two businesses based on the strength of their valuation, profitability, institutional ownership, analyst recommendations, risk, earnings and dividends.

Risk & Volatility

Amarin has a beta of 0.81, suggesting that its stock price is 19% less volatile than the S&P 500. Comparatively, Novo Nordisk A/S has a beta of 0.7, suggesting that its stock price is 30% less volatile than the S&P 500.

Institutional and Insider Ownership

22.3% of Amarin shares are held by institutional investors. Comparatively, 11.5% of Novo Nordisk A/S shares are held by institutional investors. 4.2% of Amarin shares are held by company insiders. Comparatively, 0.1% of Novo Nordisk A/S shares are held by company insiders. Strong institutional ownership is an indication that large money managers, endowments and hedge funds believe a stock will outperform the market over the long term.

Profitability

This table compares Amarin and Novo Nordisk A/S’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Amarin	-10.87%	-0.52%	-0.36%
Novo Nordisk A/S	35.36%	58.61%	20.91%

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Amarin and Novo Nordisk A/S, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Amarin	2	1	0	0	1.33
Novo Nordisk A/S	5	16	5	0	2.00

Amarin currently has a consensus price target of $13.00, indicating a potential upside of 11.97%. Novo Nordisk A/S has a consensus price target of $59.44, indicating a potential upside of 47.23%. Given Novo Nordisk A/S’s stronger consensus rating and higher probable upside, analysts clearly believe Novo Nordisk A/S is more favorable than Amarin.

Earnings and Valuation

This table compares Amarin and Novo Nordisk A/S”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Amarin	$213.65 million	1.15	-$38.80 million	($0.96)	-12.09
Novo Nordisk A/S	$46.80 billion	3.85	$15.51 billion	$3.97	10.17

Novo Nordisk A/S has higher revenue and earnings than Amarin. Amarin is trading at a lower price-to-earnings ratio than Novo Nordisk A/S, indicating that it is currently the more affordable of the two stocks.

Summary

Novo Nordisk A/S beats Amarin on 11 of the 14 factors compared between the two stocks.

About Amarin

Amarin Corporation plc, a pharmaceutical company, engages in the development and commercialization of therapeutics for the treatment of cardiovascular diseases in the United States, European countries, Canada, Lebanon, and the United Arab Emirates. The company offers VASCEPA, a prescription-only omega-3 fatty acid product, used as an adjunct to diet for reducing triglyceride levels in adult patients with severe hypertriglyceridemia. It sells its products principally to wholesalers and specialty pharmacy providers. The company has a collaboration with Mochida Pharmaceutical Co., Ltd. to develop and commercialize drug products and indications based on the active pharmaceutical ingredient in Vascepa. The company was formerly known as Ethical Holdings plc and changed its name to Amarin Corporation plc in 1999. Amarin Corporation plc was incorporated in 1989 and is headquartered in Dublin, Ireland.

About Novo Nordisk A/S

Novo Nordisk A/S, together with its subsidiaries, engages in the research and development, manufacture, and distribution of pharmaceutical products in Europe, the Middle East, Africa, Mainland China, Hong Kong, Taiwan, North America, and internationally. It operates in two segments, Diabetes and Obesity Care, and Rare Disease. The Diabetes and Obesity care segment provides products for diabetes, obesity, cardiovascular, and other emerging therapy areas. The Rare Disease segment offers products in the areas of rare blood disorders, rare endocrine disorders, and hormone replacement therapy. The company also provides insulin pens, growth hormone pens, and injection needles. In addition, it offers smart solutions for diabetes treatment, such as smart insulin pens and Dose Check, an insulin dose guidance application. The company has a collaboration agreement with Aspen Pharmaceuticals to produce insulin products; and with Korro Bio, Inc. for the discovery and development of new genetic medicines to treat cardiometabolic diseases. Novo Nordisk A/S was founded in 1923 and is headquartered in Bagsvaerd, Denmark.