Contrasting NovoCure (NASDAQ:NVCR) and Insulet (NASDAQ:PODD)

Insulet (NASDAQ:PODD) and NovoCure (NASDAQ:NVCR) are both medical companies, but which is the better business? We will compare the two companies based on the strength of their dividends, valuation, earnings, analyst recommendations, profitability, institutional ownership and risk.

Institutional & Insider Ownership

84.6% of NovoCure shares are owned by institutional investors. 0.5% of Insulet shares are owned by insiders. Comparatively, 6.3% of NovoCure shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company will outperform the market over the long term.

Earnings & Valuation

This table compares Insulet and NovoCure”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Insulet	$1.70 billion	11.45	$206.30 million	$5.84	47.45
NovoCure	$577.74 million	4.78	-$207.04 million	($1.40)	-18.23

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

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Insulet and NovoCure, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Insulet	0	3	13	0	2.81
NovoCure	0	2	4	0	2.67

Insulet presently has a consensus price target of $272.81, suggesting a potential downside of 1.55%. NovoCure has a consensus price target of $32.67, suggesting a potential upside of 28.00%. Given NovoCure’s higher possible upside, analysts plainly believe NovoCure is more favorable than Insulet.

Volatility and Risk

Insulet has a beta of 1.22, suggesting that its share price is 22% more volatile than the S&P 500. Comparatively, NovoCure has a beta of 0.64, suggesting that its share price is 36% less volatile than the S&P 500.

Profitability

This table compares Insulet and NovoCure’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Insulet	21.22%	27.98%	9.16%
NovoCure	-25.93%	-41.48%	-12.74%

Summary

Insulet beats NovoCure on 11 of the 14 factors compared between the two stocks.

About Insulet

Insulet Corporation develops, manufactures, and sells insulin delivery systems for people with insulin-dependent diabetes. The company's Omnipod platform includes the Omnipod 5 Automated Insulin Delivery System (Omnipod 5) which includes a proprietary AID algorithm embedded in the Pod that integrates with a third-party continuous glucose monitor to obtain glucose values through wireless bluetooth communication; Omnipod DASH that features a bluetooth enabled Pod that is controlled by a smartphone-like Personal Diabetes Manager with a color touch screen user interface; and Omnipod GO, a standalone, wearable, insulin delivery system that provides a fixed rate of continuous rapid-acting insulin for 72 hours. The company sells its products primarily through independent distributors and pharmacy channels, as well as directly in the United States, Canada, Europe, the Middle East, Australia, and internationally. Insulet Corporation was incorporated in 2000 and is headquartered in Acton, Massachusetts.

About NovoCure

NovoCure Limited, an oncology company, engages in the development, manufacture, and commercialization of tumor treating fields (TTFields) devices for the treatment of solid tumor cancers in the United States, Germany, Japan, Greater China, and internationally. The company’s TTFields devices include Optune Gio and Optune Lua. It also has ongoing clinical trials investigating TTFields in brain metastases, gastric cancer, glioblastoma, liver cancer, non-small cell lung cancer, pancreatic cancer, and ovarian cancer. NovoCure Limited was incorporated in 2000 and is headquartered in Saint Helier, Jersey.