Question

1. Earnings per Share of Common Stock compare from Gilead Science and Celgene

Answer 1

Answers

Earnings per share (EPS) are the portion of a company's profit allocated to each outstanding share of common stock. Earnings per share serve as an indicator of a company's profitability. EPS is calculated as:

EPS = (Net Income - Dividends on Preferred Stock) / Average Outstanding Share

1. in this article, I compare some principal parameters between the biopharmaceutical giants Gilead and Celgene.

2. in my opinion, both companies are a great buy right now due to their successful revolutionary drugs and top-quality pipelines which should sustain long-term growth.

3. in my view, Gilead is a bit more attractive than Celgene due to superior valuation metrics and a higher upside potential.

The case for Gilead Sciences	The case for Celgene
Growth doesn't appear to be on the table for Gilead Sciences. Sales for its hepatitis C franchise are plunging. Competition exerting pressure on prices is one factor. However, the bigger issue is that Gilead's drugs have cured so many hep C patients that there aren't as many new ones remaining seeking treatment	Why buy Celgene stock? The main reason can be summed up in one word: growth. Celgene's earnings have grown by nearly 25% annually over the last five years. The biotech is expected to turn in a similar performance over the next five years, with Wall Street analysts projecting annual earnings growth of 21%.
There are a couple of reasons to seriously consider buying Gilead stock, though. One is if you're looking for an investment that generates steady income. Gilead is one of only a handful of biotech’s to pay a dividend. Its yield currently stands at 2.9%. The company initiated its dividend program in 2015 and has increased the payment 10% each year since. Gilead uses only 20% of earnings to fund the dividend program, so further hikes should be in store.	A key driver of that expected growth is Celgene's current product lineup. Sales for the biotech's No. 1 product Revlimid continue to climb and could double over the next five years. By 2022, the drug is projected to be the top-selling cancer drug in the world.
The second reason to buy Gilead Sciences is that the stock is dirt cheap. Shares currently trade at less than 10 times expected earnings. Of course, the first question investors should ask about a stock trading at such a low earnings multiple is: What's the outlook for earnings down the road?	While Reclaimed is Celgene's biggest moneymaker, the company has other fast-growing blockbuster drugs. Sales for multiple myeloma drug Pomalyst soared 33% year over year in the first quarter of 2017. Autoimmune disease drug Otezla saw sales jump nearly 24% over the prior-year period.