NVO - Better Buy: Eli Lilly vs. Merck
Merck (NYSE: MRK) and Eli Lilly (NYSE: LLY) are two of the largest pharmaceutical companies in the world, and both provide decent prospects for investors. Comparing the two over the past 12 months does yield a clear winner from Wall Street's perspective, though. Merck -- whose shares are up by about 18% since early January -- has outperformed Eli Lilly and its 4% year-to-date return. Still, hindsight is 20/20, and past performance doesn't guarantee much of anything.
Let's examine the situations with their underlying businesses, and attempt to predict whether Merck will keep outpacing Eli Lilly, or whether the latter is the more attractive stock to buy today.
Merck's most lucrative area of focus at the moment is oncology. In particular, its crown-jewel drug, Keytruda, is approved for a plethora of cancers, including lung cancer and melanoma. Lynparza and Lenvima round out its oncology segment, and although their sales figures are nowhere close to Keytruda's, they are on the rise. Second in importance for the company's top line is its vaccine business, led by HPV vaccines Gardasil and Gardasil 9. Merck's portfolio includes a raft of treatments for conditions across the medical landscape, but its oncology and vaccine segments will likely be its key growth drivers for the foreseeable future.