The Shares Researcher

Intro Today we’ll look at two companies at the same time. Why two you might ask? Because they have very similar characteristics in many ways. Both companies have been spun off recently by a large pharmaceutical company – Viatris from Pfizer and Organon from Merck. Furthermore, they show the following similarities: -High debt load due to one-time payment to parent company -Stagnating revenues and hence a lack of growth -Significant cash flow generation from existing products -Small market capitalisation compared to the parent company -Tiny or no dividend pay-out yet in order to reduce debt burden -Limited analyst coverage The above points might have led investors – that got the shares from the parent company – to sell them in the open market. As can be seen below, the valuation looks rather undemanding and might show good upside potential in the next two to five years. Valuation The two firms show a very undemanding valuation based on historical and short-term future numbers: Viatris gu...