Gilead Sciences (NASDAQ:GILD) vs. Beam Therapeutics (NASDAQ:BEAM) Critical Analysis

Gilead Sciences (NASDAQ:GILD) and Beam Therapeutics (NASDAQ:BEAM) are both medical companies, but which is the better stock? We will compare the two businesses based on the strength of their dividends, institutional ownership, risk, valuation, earnings, profitability and analyst recommendations.

Dividends

Gilead Sciences pays an annual dividend of $3.08 per share and has a dividend yield of 4.5%. Beam Therapeutics pays an annual dividend of $0.90 per share and has a dividend yield of 3.5%. Gilead Sciences pays out 68.4% of its earnings in the form of a dividend. Beam Therapeutics pays out -47.4% 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. Gilead Sciences has increased its dividend for 9 consecutive years. Gilead Sciences is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Earnings & Valuation

This table compares Gilead Sciences and Beam Therapeutics’ top-line revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Gilead Sciences	$27.12 billion	3.11	$5.67 billion	$4.50	15.06
Beam Therapeutics	$377.71 million	5.56	-$132.53 million	($1.90)	-13.53

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

Insider and Institutional Ownership

83.7% of Gilead Sciences shares are held by institutional investors. Comparatively, 99.7% of Beam Therapeutics shares are held by institutional investors. 0.2% of Gilead Sciences shares are held by insiders. Comparatively, 4.4% of Beam Therapeutics shares are held by insiders. Strong institutional ownership is an indication that hedge funds, large money managers and endowments believe a stock is poised for long-term growth.

Profitability

This table compares Gilead Sciences and Beam Therapeutics’ net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Gilead Sciences	20.89%	38.85%	13.60%
Beam Therapeutics	-35.09%	-15.90%	-9.75%

Analyst Recommendations

This is a summary of recent ratings and target prices for Gilead Sciences and Beam Therapeutics, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Gilead Sciences	1	9	5	0	2.27
Beam Therapeutics	0	8	5	0	2.38

Gilead Sciences presently has a consensus target price of $85.36, suggesting a potential upside of 25.99%. Beam Therapeutics has a consensus target price of $41.00, suggesting a potential upside of 59.53%. Given Beam Therapeutics’ stronger consensus rating and higher possible upside, analysts clearly believe Beam Therapeutics is more favorable than Gilead Sciences.

Volatility & Risk

Gilead Sciences has a beta of 0.19, meaning that its stock price is 81% less volatile than the S&P 500. Comparatively, Beam Therapeutics has a beta of 1.77, meaning that its stock price is 77% more volatile than the S&P 500.

Summary

Gilead Sciences beats Beam Therapeutics on 9 of the 16 factors compared between the two stocks.

About Gilead Sciences

Gilead Sciences, Inc., a biopharmaceutical company, discovers, develops, and commercializes medicines in the areas of unmet medical need in the United States, Europe, and internationally. The company provides Biktarvy, Genvoya, Descovy, Odefsey, Truvada, Complera/ Eviplera, Stribild, Sunlencs, and Atripla products for the treatment of HIV/AIDS; Veklury, an injection for intravenous use, for the treatment of COVID-19; and Epclusa, Harvoni, Vemlidy, and Viread for the treatment of viral hepatitis. It also offers Yescarta, Tecartus, and Trodelvy products for the treatment of oncology; Letairis, an oral formulation for the treatment of pulmonary arterial hypertension; and AmBisome, a liposomal formulation for the treatment of serious invasive fungal infections. The company has collaboration agreements with Arcus Biosciences, Inc.; Merck Sharp & Dohme Corp.; Pionyr Immunotherapeutics Inc.; Tizona Therapeutics, Inc.; Galapagos NV; Janssen Sciences Ireland Unlimited Company; Japan Tobacco, Inc.; Dragonfly Therapeutics, Inc.; Arcellx, Inc.; Everest Medicines; Merck & Co, Inc.; Tentarix Biotherapeutics Inc.; and Assembly Biosciences, Inc. It also has research collaboration, option, and license agreement with Merus N.V. for the discovery of novel dual tumor-associated antigens (TAA) targeting trispecific antibodies. The company was incorporated in 1987 and is headquartered in Foster City, California.

About Beam Therapeutics

Beam Therapeutics Inc., a biotechnology company, engages in the development of precision genetic medicines for patients suffering from serious diseases in the United States. It develops BEAM-101 for the treatment of sickle cell disease or beta-thalassemia; and BEAM-302, a liver-targeting LNP formulation to treat severe alpha-1 antitrypsin deficiency; BEAM-201, an anti-CD7 CAR-T product candidate, which is in Phase 1/2 clinical trials for the treatment of refractory T-cell acute lymphoblastic leukemia/T cell lymphoblastic lymphoma; and BEAM-301, a liver-targeting LNP formulation for the treatment of glycogen storage disease 1a. The company has research collaboration agreement with Pfizer Inc., focus on in vivo base editing programs for targets rare genetic diseases of the liver, muscle, and central nervous system; Apellis Pharmaceuticals to conduct preclinical research on target specific genes within the complement system in various organs, including the eye, liver, and brain; Verve Therapeutics, Inc., for cardiovascular disease treatments; Sana Biotechnology, Inc., to research, develop, and commercialize rights to CRISPR Cas12b for cell therapy programs; and Orbital Therapeutics design RNA for the prevention, treatment or diagnosis of human disease. Beam Therapeutics Inc. was incorporated in 2017 and is based in Cambridge, Massachusetts.