Contrasting Johnson & Johnson (NYSE:JNJ) & Arena Pharmaceuticals (NYSE:ARNA)
Johnson & Johnson (NYSE:JNJ) and Arena Pharmaceuticals (NASDAQ:ARNA) are both medical companies, but which is the better investment? We will compare the two businesses based on the strength of their dividends, risk, earnings, profitability, institutional ownership, valuation and analyst recommendations.
Valuation & Earnings
This table compares Johnson & Johnson and Arena Pharmaceuticals’ revenue, earnings per share (EPS) and valuation.
|Gross Revenue||Price/Sales Ratio||Net Income||Earnings Per Share||Price/Earnings Ratio|
|Johnson & Johnson||$82.06 billion||4.85||$15.12 billion||$8.68||17.44|
|Arena Pharmaceuticals||$17.97 million||149.58||-$29.40 million||($2.95)||-18.18|
This is a summary of current recommendations and price targets for Johnson & Johnson and Arena Pharmaceuticals, as provided by MarketBeat.
|Sell Ratings||Hold Ratings||Buy Ratings||Strong Buy Ratings||Rating Score|
|Johnson & Johnson||0||3||10||0||2.77|
Johnson & Johnson currently has a consensus price target of $162.27, indicating a potential upside of 7.22%. Arena Pharmaceuticals has a consensus price target of $66.20, indicating a potential upside of 23.42%. Given Arena Pharmaceuticals’ higher probable upside, analysts plainly believe Arena Pharmaceuticals is more favorable than Johnson & Johnson.
Institutional and Insider Ownership
67.4% of Johnson & Johnson shares are held by institutional investors. Comparatively, 83.8% of Arena Pharmaceuticals shares are held by institutional investors. 0.2% of Johnson & Johnson shares are held by insiders. Comparatively, 2.7% of Arena Pharmaceuticals shares are held by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock will outperform the market over the long term.
Risk and Volatility
Johnson & Johnson has a beta of 0.69, suggesting that its stock price is 31% less volatile than the S&P 500. Comparatively, Arena Pharmaceuticals has a beta of 1.64, suggesting that its stock price is 64% more volatile than the S&P 500.
This table compares Johnson & Johnson and Arena Pharmaceuticals’ net margins, return on equity and return on assets.
|Net Margins||Return on Equity||Return on Assets|
|Johnson & Johnson||22.18%||39.30%||15.18%|
Arena Pharmaceuticals beats Johnson & Johnson on 8 of the 14 factors compared between the two stocks.
Johnson & Johnson Company Profile
Johnson & Johnson, together with its subsidiaries, researches and develops, manufactures, and sells various products in the health care field worldwide. It operates in three segments: Consumer, Pharmaceutical, and Medical Devices. The Consumer segment offers baby care products under the JOHNSON'S brand; oral care products under the LISTERINE brand; beauty products under the AVEENO, CLEAN & CLEAR, DABAO, JOHNSON'S Adult, LE PETITE MARSEILLAIS, NEUTROGENA, and OGX brands; over-the-counter medicines, including acetaminophen products under the TYLENOL brand; cold, flu, and allergy products under the SUDAFED brand; allergy products under the BENADRYL and ZYRTEC brands; ibuprofen products under the MOTRIN IB brand; and acid reflux products under the PEPCID brand. This segment also provides women's health products, such as sanitary pads and tampons under the STAYFREE, CAREFREE, and o.b. brands; wound care products comprising adhesive bandages under the BAND-AID brand; and first aid products under the NEOSPORIN brand. The Pharmaceutical segment offers products in various therapeutic areas, including immunology, infectious diseases, neuroscience, oncology, pulmonary hypertension, and cardiovascular and metabolic diseases. The Medical Devices segment provides orthopedic products; general surgery, biosurgical, endomechanical, and energy products; electrophysiology products to treat cardiovascular diseases; sterilization and disinfection products to reduce surgical infection; diabetes care products; and vision care products, such as disposable contact lenses and ophthalmic products related to cataract and laser refractive surgery. The company markets its products to general public, and retail outlets and distributors, as well as distributes directly to wholesalers, hospitals, and health care professionals for prescription use. It has research and collaboration alliance with Morphic Therapeutic. The company was incorporated in 1887 and is based in New Brunswick, New Jersey.
Arena Pharmaceuticals Company Profile
Arena Pharmaceuticals, Inc., a biopharmaceutical company, focuses on providing novel medicines with pharmacology and pharmacokinetics to patients worldwide. Its investigational clinical programs include ralinepag (APD811), which is in Phase III trial to treat pulmonary arterial hypertension; etrasimod (APD334) for ulcerative colitis, and Crohn's disease, as well as for atopic dermatitis and other indications; and Olorinab (APD371), which is in Phase II trial for the treatment of gastrointestinal pain. It is also developing APD418, a calcium-independent myofilament derepressor for the treatment of decompensated heart failure. The company has collaboration agreements with United Therapeutics Corporation; Everest Medicines Limited; Axovant Sciences GmbH; Outpost Medicine LLC; CY Biotech Company Limited; Boehringer Ingelheim International GmbH; Eisai Co., Ltd.; and Eisai Inc. Arena Pharmaceuticals, Inc. was founded in 1997 and is based in San Diego, California.
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