June 13, 2024
Top 10 Stock Royalty Pharma Buy Recommendation
How to read the ranks
For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".
Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".
Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.
Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.
(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).
(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.
Snapshot: Royalty Pharma – Top 10 Stock in SDG 9: Industry, Innovation and Infrastructure
Royalty Pharma is listed as a top 10 stock on June 13, 2024 in the market index SDG 9 because of its high performance in at least one of the Obermatt investment strategies. While half the consolidated Obermatt Ranks are above-average, investor sentiment is negative and growth performance is below market average, both a sign for caution. Based on the Obermatt 360° View of 69 (high 69% performer), Obermatt assesses an overall buy recommendation for Royalty Pharma on June 13, 2024.
Snapshot: Obermatt Ranks
When Obermatt identifies the Top 10 stocks in a market, it’s based on a certain investment strategy. The best performing stocks usually aren’t the ones that everyone is talking about (those are often "over-priced" and have low Value ranks).
For each investment strategy, we provide you with more detailed analysis and our recommendation. You see the ranks of the top 10 stocks ranked by that particular investment strategy (360° View, Sentiment, Value, Growth, Safety and Combined Financial Performance).
360° View: Obermatt 360° View Royalty Pharma Buy
| 360 METRICS | June 13, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 96 |
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| GROWTH | ||||||||
| GROWTH | 31 |
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| SAFETY | ||||||||
| SAFETY | 69 |
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| SENTIMENT | ||||||||
| SENTIMENT | 37 |
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| 360° VIEW | ||||||||
| 360° VIEW | 69 |
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ANALYSIS: With an Obermatt 360° View of 69 (better than 69% compared with alternatives), overall professional sentiment and financial characteristics for the stock Royalty Pharma are above average. The 360° View is based on consolidating four consolidated indicators, with half the metrics below and half above average for Royalty Pharma. The consolidated Value Rank has an attractive rank of 96, which means that the share price of Royalty Pharma is on the lower side compared with the typical size in indicators such as revenues, profits, and invested capital. This means the stock price is lower than for 96% of alternative stocks in the same industry. The company is also safely financed with a Safety rank of 69. But the professional market sentiment is below average compared with other stock investment alternatives with a Sentiment Rank of 37. Professional investors are more confident in 63% other stocks. The consolidated Growth Rank also has a low rank of 31, which means that the company is below average in terms of growth momentum when looking at financial metrics such as revenue, profit, invested capital growth, and stock returns. 69 of its competitors have better growth. ...read more
RECOMMENDATION: With a consolidated 360° View of 69, Royalty Pharma is better positioned than 69% of all alternative stock investment opportunities based on the Obermatt Method. The picture is mixed here. The stock seems to be a good value (Value Rank of 96), and the financing structure is on the safer side (Safety Rank of 69). However, sentiment in the professional investor community is below-average (Sentiment Rank of 37), as is the growth momentum for the company (Growth Rank of 31). Since the company is good value and the share price low, it should attract investors, yet professionals are skeptical. Even though the financing structure is not as important as Value, Growth, and Sentiment, investors should still be careful with this decision and conduct further research if they are serious about investing in this company. ...read more
Sentiment Strategy: Professional Market Sentiment for Royalty Pharma only reserved
ANALYSIS: With an Obermatt Sentiment Rank of 37 (better than 37% compared with alternatives), overall professional sentiment and engagement for the stock Royalty Pharma is below industry average. The Sentiment Rank is based on consolidating four sentiment indicators, with half of the indicators below and the other half above average for Royalty Pharma. Analyst Opinions are at a rank of 50 (better than 50% of alternative investments). Currently, stock research analysts tend to recommend a stock investment in the company. There are also many institutional investors invested in the stock, represented by a Professional Investors rank of 64 which means that currently, professional investors hold more stock in this company than in 64% of alternative investment opportunities. But Analyst Opinions Change has a rank of 21, which means that stock research experts are changing their opinions for the worse in recommending investing in the company. In other words, they are getting more critical of investments in Royalty Pharma. Furthermore, Market Pulse has a rank of 34, which means that the current professional news and professional social networks are on the negative side when discussing this company (more negative news than for 66% of competitors). ...read more
RECOMMENDATION: With a consolidated Sentiment Rank of 37 (less encouraging than 63% compared with investment alternatives), Royalty Pharma has a reputation among professional investors that is below that of its competitors. Three below-market sentiment indicators are a sign of caution, even if the stock has significantly appreciated. If analysts change their opinions, the stock may become too expensive. If the price is on the way down, the trend may continue. This may be a stock with a good reputation and history, but it may have reached its breaking point by now. Investors should look at the Value Ranks as well. If they indicate trouble, it may be around the corner. ...read more
Value Strategy: Royalty Pharma Stock Price Value at the top
ANALYSIS: With an Obermatt Value Rank of 96 (better than 96% compared with alternatives) for 2024, Royalty Pharma shares are significantly less expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators above average for Royalty Pharma. Price-to-Profit (also referred to as price to earnings, P/E ratio) is 91 which means that the stock price compared with what market professionals expect for future profits is lower than for 91% of comparable companies, indicating a good value concerning Royalty Pharma's profit levels. The same is valid for the expected Price-to-Book Capital ratio (also referred to as market-to-book ratio) with a Price-to-Capital Rank of 79, and for Dividend Yield with a Dividend Yield Rank of 94. But, compared with other companies in the same industry, the stock price is higher than average as regards expected revenues; only 83% of all competitors have an even higher stock price as regards to sales revenues (a Price-to-Sales Rank of 17). Profits, the level of invested capital, and dividend policy suggest that this stock is attractively priced. ...read more
RECOMMENDATION: The overall picture with a consolidated Value Rank of 96, is a buy recommendation based on Royalty Pharma's stock price compared with the company's operational size and dividend yields. Since it is on the expensive side for Price-to-Sales, it may mean that Royalty Pharma has pricing power in its distribution market because it can charge higher prices than its competitors. If this is the case, all four value indicators are positive signals for purchasing Royalty Pharma shares. ...read more
Growth Strategy: Royalty Pharma Growth Momentum low
ANALYSIS: With an Obermatt Growth Rank of 31 (better than 31% compared with alternatives), Royalty Pharma shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Royalty Pharma. Sales Growth has a rank of 53 which means that currently, professionals expect the company to grow more than 53% of its competitors. Capital Growth is also above 24% of competitors with a rank of 61. But Profit Growth only has a rank of 24, which means that currently professionals expect the company to grow its profits less than 76% of its competitors. And Stock Returns have also been below average with a rank of only 32. ...read more
RECOMMENDATION: The overall picture with a consolidated Growth Rank of 31, is a hold recommendation for growth and momentum investors. Profits are sometimes low if the company invests in the future. The positive revenue and capital investment outlook confirms such an interpretation. Both revenues and capital are solid growth indicators, and lower profits in such a case would be encouraging. But the investors see it differently by punishing the share price. Sometimes, Mister Market is not very reliable, because it is not uncommon for it to be volatile. Investors should look out for signs of growth expenditure that could justify low profit growth, and they may also find reasons why recent stock price developments don't confirm the growth outlook of operations. While operating growth indicators are not perfect, they are more reliable indicators for future performance than stock prices that can repeatedly surprise investors. ...read more
Safety Strategy: Royalty Pharma Debt Financing Safety above-average
| SAFETY METRICS | June 13, 2024 | |||||||
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| LEVERAGE | ||||||||
| LEVERAGE | 57 |
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| REFINANCING | ||||||||
| REFINANCING | 31 |
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| LIQUIDITY | ||||||||
| LIQUIDITY | 80 |
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| CONSOLIDATED RANK: SAFETY | ||||||||
| CONSOLIDATED RANK: SAFETY | 69 |
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ANALYSIS: With an Obermatt Safety Rank of 69 (better than 69% compared with alternatives), the company Royalty Pharma has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Royalty Pharma is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above average for Royalty Pharma. Leverage is at a rank of 57, meaning the company has a below-average debt-to-equity ratio. It has less debt than 57% of its competitors. Liquidity is also good at a rank of 80, meaning the company generates more profit to service its debt than 80% of its competitors. This indicates that the company is on the safer side when it comes to debt service. But Refinancing is lower at a rank of 31, which means that the portion of the debt that is about to be refinanced is above-average. It has more debt in the refinancing stage than 69% of its competitors. ...read more
RECOMMENDATION: With a consolidated Safety Rank of 69 (better than 69% compared with alternatives), Royalty Pharma has a financing structure that is safer than that of its competitors. The refinancing issues could be a short-term problem, especially if the company has reputation issues. Banks and investors don't like to refinance debt if there are clouds on the horizon. For this reason, investors should look at the refinancing environment for Royalty Pharma. Does it look safe that debt that is coming due can be covered with new debt? If that is the case, then the financing situation of the company is on the safer side. If not, it may be better to wait until refinancing has been completed and the Refinancing rank is good again. ...read more
Combined financial peformance: Royalty Pharma Top Financial Performance
| COMBINED PERFORMANCE | June 13, 2024 | |||||||
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| VALUE | ||||||||
| VALUE | 96 |
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| GROWTH | ||||||||
| GROWTH | 31 |
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| SAFETY | ||||||||
| SAFETY | 80 |
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| COMBINED | ||||||||
| COMBINED | 85 |
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ANALYSIS: With an Obermatt Combined Rank of 85 (better than 85% compared with investment alternatives), Royalty Pharma (Pharmaceuticals, USA) shares have much better financial characteristics than comparable stocks. Shares of Royalty Pharma are a good value (attractively priced) with a consolidated Value Rank of 96 (better than 96% of alternatives), are safely financed (Safety Rank of 69, which means low debt burdens), but show below-average growth (Growth Rank of 31). ...read more
RECOMMENDATION: A Combined Rank of 85, is a strong buy recommendation based on Royalty Pharma's financial characteristics. As the company Royalty Pharma's key financial metrics exhibit good value (Obermatt Value Rank of 96) but low growth (Obermatt Growth Rank of 31) while being safely financed (Obermatt Safety Rank of 69), it may be a safer investment because companies with low debt can better withstand times of crises. Yet the good value, better than 96% of comparable companies, may also indicate that the company's future is challenging. If you believe that low growth is temporary or just due to a specific current event, you may conclude that the good value of the stock provides an attractive investment opportunity and the downside is limited due to below-average financing risks. ...read more
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