Analyzing Merck & Co., Inc. (NYSE:MRK) & Lexaria Bioscience (NASDAQ:LEXX)

Lexaria Bioscience (NASDAQ:LEXX) and Merck & Co., Inc. (NYSE:MRK) are both healthcare companies, but which is the better investment? We will compare the two businesses based on the strength of their profitability, earnings, analyst recommendations, valuation, institutional ownership, dividends and risk.

Volatility and Risk

Lexaria Bioscience has a beta of 0.6, suggesting that its share price is 40% less volatile than the S&P 500. Comparatively, Merck & Co., Inc. has a beta of 0.13, suggesting that its share price is 87% less volatile than the S&P 500.

Valuation & Earnings

This table compares Lexaria Bioscience and Merck & Co., Inc.”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Lexaria Bioscience	$194,000.00	45.27	-$11.90 million	($5.10)	-0.82
Merck & Co., Inc.	$65.01 billion	5.57	$18.25 billion	$0.97	151.30

Merck & Co., Inc. has higher revenue and earnings than Lexaria Bioscience. Lexaria Bioscience is trading at a lower price-to-earnings ratio than Merck & Co., Inc., indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

13.1% of Lexaria Bioscience shares are held by institutional investors. Comparatively, 76.1% of Merck & Co., Inc. shares are held by institutional investors. 8.4% of Lexaria Bioscience shares are held by insiders. Comparatively, 0.2% of Merck & Co., Inc. 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.

Profitability

This table compares Lexaria Bioscience and Merck & Co., Inc.’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Lexaria Bioscience	N/A	-174.93%	-143.89%
Merck & Co., Inc.	3.64%	16.56%	5.89%

Analyst Ratings

This is a summary of current ratings and target prices for Lexaria Bioscience and Merck & Co., Inc., as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Lexaria Bioscience	1	0	1	0	2.00
Merck & Co., Inc.	1	11	16	1	2.59

Lexaria Bioscience currently has a consensus price target of $22.50, indicating a potential upside of 439.57%. Merck & Co., Inc. has a consensus price target of $155.74, indicating a potential upside of 6.12%. Given Lexaria Bioscience’s higher possible upside, equities analysts clearly believe Lexaria Bioscience is more favorable than Merck & Co., Inc..

Summary

Merck & Co., Inc. beats Lexaria Bioscience on 11 of the 15 factors compared between the two stocks.

About Lexaria Bioscience

Lexaria Bioscience Corp. operates as a biotechnology company. It develops and out-licenses its patented drug delivery technology, DehydraTECH, which combines lipophilic molecules or active pharmaceutical ingredients with specific long-chain fatty acids and carrier compounds that improve the way they enter the bloodstream, increasing their effectiveness and allowing for lower overall dosing while promoting healthier oral ingestion methods. The company's DehydraTECH is used with a range of active molecules encompassing fat-soluble vitamins, pain medications, hormones, PDE5 inhibitors, antivirals, oral nicotine and its analogs, and cannabinoids. Its DehydraTECH technology evaluates therapeutic indications, including hypertension, heart disease, and diabetes; and is suitable for a variety of product formats, such as pharmaceuticals, nutraceuticals, over the counter, and consumer packaged goods. Lexaria Bioscience Corp. was incorporated in 2004 and is headquartered in Kelowna, Canada.

About Merck & Co., Inc.

Merck & Co., Inc. is a health care company, which engages in the provision of health solutions through its prescription medicines, vaccines, biologic therapies, animal health, and consumer care products. It operates through the following segments: Pharmaceutical, Animal Health, and Other. The Pharmaceutical segment includes human health pharmaceutical and vaccine products. The Animal Health segment discovers, develops, manufactures, and markets animal health products, such as pharmaceutical and vaccine products, for the prevention, treatment and control of disease in livestock, and companion animal species. The Other segment consists of sales for the non-reportable segments of healthcare services. The company was founded in 1891 and is headquartered in Rahway, NJ.