Stock Evaluation Novartis AG Johnson Johnson Pfizer Novartis

Stock Evaluation Novartis AG, Johnson & Johnson, Pfizer

Novartis AG(NVS) Founded : 1996, 20 years ago ( from merger) Headquarters : Basel, Switzerland Key People : Joerg Reinhardt (Chairman), Joseph Jimenez (CEO) Subsidiaries : Ciba Vision, Sandoz, Alcon, Chiron Corporation

Formation (merging)

Timeline • Geigy(1758) by Johann Rudolf materials, chemicals and drugs • Ciba (1859) by Alexander Clavel started as a dyeing company, first pharmaceutical substance in 1900 • Sandoz (1886) in Basel by Dr Alfred Kern and Edouard Sandoz as chemical company, first pharmaceutical substance was in 1895 • Merger one : Ciba and Geigy merged to form Ciba-Geigy Ltd (1970), ten years later in 1981 first transdermal delivery system, Scopoderm TTS (hyoscine hydrobromide) was introduced for travel sickness.

• 1994 : Sandoz acquired baby food company Gerber • 1996 : December Sandoz + Ciba-Geigy Ltd to form Novartis AG in one of the largest corporate mergers in history. • 2003 : Novartis acquired the worldwide adult medical nutrition business of Mead Johnson and Company • 2005 : Sandoz became the world leader in generic pharmaceuticals after acquiring Germany’s Hexal AG and US-based Eon Labs • As of 2013, 125000 people works for Novartis 47% in Europe, 24% in Africa, Asia and Australia, 21% in the USA and 8% in Canada and Latin America

Johnson & Johnson Founded : 1886, 130 years ago Headquarters : New Jersey, USA Key People : Alex Gorsky (Chairman and CEO) Subsidiaries : Mc. Neil Consumer Healthcare, Vistakon, Neutrogena De. Puy

Timeline • 1886 : Johnson & Johnson is founded by 3 Johnsons: Robert Wood Johnson, James Wood Johnson, and, Edward Mead Johnson & Johnson began as a ready to use surgical dressings. • 1959 : Mcneil Consumer Healthcare is purchased by J&J. • 1960 : Using Mcneil Labs they make Tylenol, no prescription necessary

• 1961 : J&J acquires Jansen pharmaceuticals • 1998 : J&J buys De. Puy Synthes Company for $19. 7 Billion dollars Synthesis makes implants to mend bone fractions and produce surgical power tools. • 2010 : J+J buys Crucell for $2. 4 billion Crucell is a producer of vaccines

Pfizer Incorporation (PFE) Founded : 1849; 167 years ago Headquarters : New York City Key People : lan Read (Chairman & CEO) Subsidiaries : Agouron, Pharmaceuticals, G. D. Searle,

TIMELINE • 1849 : Pfizer was founded by cousins Charles Pfizer and Charles F. Erhart in New York City as a manufacturer of fine chemical. • 1906 : Sales totaled $3. 4 million. • 1950 : Discovery of Terramycin (oxytetracycline) that put Pfizer on a path towards becoming a research-based pharmaceutical company. • 1959 : Pfizer established an animal health division with an 700 -acre (2. 8 km 2) farm and research facility in Terre Haute, Indiana.

• 2000 - 2009 : Pfizer made numerous acquisitions, including Warner– Lambert in 2000, Pharmacia in 2003, and Wyeth in 2009 (the largest of the three at $68 billion). • 2016 : Pfizer Incorporation was expected to merge with Allergan plc, in a deal that would have been worth $160 billion, to create the Irelandbased "Pfizer plc".

Tools of Analysis • Earnings per Share(EPS) : EPS is the portion of a company's profit allocated to each outstanding share of common stock. Higher, the better • Price-earnings ratio (P/E Ratio) : P/E ratio is the ratio for valuing a company that measures its current share price relative to its per-share earnings. Measure of how much we are paying for $1 worth of earnings. Cheaper, the better • Dividend per share (DPS) : DPS is the sum of declared dividends issued by a company for every ordinary share outstanding. Lower doesn’t mean its worse • Return on Equity (ROE) : ROE is the amount of net income returned as a percentage of shareholders equity. Higher the better • Return on Invested Capital (ROIC) : ROIC measures the return that an investment generates for those who have provided capital, i. e. bondholders and stockholders etc. Higher the better

Tables of Analysis Tools 2011 Earnings per share (NVS) Price to Earnings Ratio (NVS) Dividend per Share (NVS) Return on Equity (NVS) Ro. IC (NVS) Tools 2012 2013 2014 2015 TTM Avg $3. 700 $3. 790 $3. 700 $4. 130 $7. 290 $2. 820 $4. 238 $13. 500 $16. 300 $21. 200 $22. 500 $25. 100 $27. 300 $20. 983 $2. 360 $2. 720 $2. 420 $14. 120 $14. 090 $12. 790 $14. 070 $24. 060 $8. 980 $14. 685 $11. 330 $11. 580 $10. 780 $11. 800 $19. 280 $7. 390 $12. 027 2011 2012 2013 2014 2015 TTM Avg Earnings per share (JNJ) Price to Earnings ratio (JNJ) Dividend per Share (JNJ) Return on Equity (JNJ) $3. 490 $3. 860 $4. 810 $5. 700 $5. 480 $3. 020 $4. 393 $16. 000 $18. 700 $20. 440 $17. 310 $19. 640 $21. 160 $18. 875 $2. 250 $2. 400 $2. 590 $2. 760 $2. 950 $3. 200 $2. 692 $17. 020 $17. 810 $19. 920 $22. 700 $21. 870 $22. 090 $20. 235 Ro. IC (JNJ) $13. 390 $14. 220 $16. 390 $18. 470 $17. 550 $17. 020 $16. 173

Tools 2011 2012 2013 2014 2015 TTM Avg Earnings per $1. 270 share (PFE) Price to Earnings ratio (PFE) $17. 000 Dividend per $0. 800 Share (PFE) Return on $11. 780 Equity (PFE) $1. 940 $3. 190 $1. 420 $1. 110 $1. 130 $1. 677 $19. 900 $20. 300 $19. 200 $24. 300 $28. 800 $21. 583 $0. 880 $0. 960 $1. 040 $1. 020 $1. 160 $0. 993 $17. 840 $27. 940 $12. 380 $10. 240 $9. 510 $14. 948 Ro. IC (PFE) $12. 900 $19. 650 $8. 910 $7. 110 $6. 900 $10. 675 $8. 580

Charts of Analysis Earnings Per Share 8 7 6 5 4 3 2 1 0 1 2 3 Earning Per Share (NVS) 4 Earning Per Share (JNJ) 5 6 Earning Per Share (PFE) 7

Price to Earnings 30 25 20 15 10 5 0 1 2 Price to Earning Ratio (NVS) 3 4 5 Price to Earning Ratio (J N J) 6 7 Price to Earning Ratio (PFE) = Market Value per Share / Earnings per Share

Dividend Per Share 3, 5 3 2, 5 2 1, 5 1 0, 5 0 1 2 Dividend Per Share (NVS) 3 4 Dividend Per Share (J & J) 5 6 Dividend Per Share (PFE) = (Sum of dividends over a period - Special dividends) / Shares Outstanding 7

Return On Equity 30 25 20 15 10 5 0 1 2 3 Return On Equity (NVS) 4 Return On Equity (J&J) = Net Income/ Shareholder’s Equity 5 6 Return On Equity (PFE) 7

Return On Invested Capital 20 18 16 14 12 10 8 6 4 2 0 1 2 On Invested 3 Capital (NVS)4 Return 5 Return On Invested 6 Capital 7(J&J) Return On Invested Capital (PFE) =( Net income - Dividends ) / ( Debt + Equity )

Conclusion 5 yr + TTM Avg. Comparision NVS JNJ PFE $25, 00 $20, 00 $15, 00 $10, 00 $5, 00 $0, 00 EPS P/E DPS ROE ROIC The PE ratio is lower for JNJ, and EPS, DPS, ROE and ROIC is higher for JNJ which concludes that JNJ is the good pick from the above 2 companies.

Thank You By, Luke Mani Salomon Orozco & Lakpa Dolma Lama