Reviewing Mallinckrodt PLC (MNK) & AbbVie (ABBV)

Mallinckrodt PLC (NYSE: MNK) and AbbVie (NYSE:ABBV) are both mid-cap medical companies, but which is the better stock? We will contrast the two companies based on the strength of their dividends, earnings, analyst recommendations, profitability, institutional ownership, valuation and risk.

Analyst Ratings

This is a breakdown of current recommendations for Mallinckrodt PLC and AbbVie, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mallinckrodt PLC 0 2 14 0 2.88
AbbVie 0 7 6 1 2.57

Mallinckrodt PLC currently has a consensus target price of $73.03, indicating a potential upside of 100.69%. AbbVie has a consensus target price of $76.31, indicating a potential upside of 9.07%. Given Mallinckrodt PLC’s stronger consensus rating and higher probable upside, research analysts clearly believe Mallinckrodt PLC is more favorable than AbbVie.

Dividends

AbbVie pays an annual dividend of $2.56 per share and has a dividend yield of 3.7%. Mallinckrodt PLC does not pay a dividend. AbbVie pays out 62.9% of its earnings in the form of a dividend. Mallinckrodt PLC has increased its dividend for 44 consecutive years.

Earnings & Valuation

This table compares Mallinckrodt PLC and AbbVie’s top-line revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Mallinckrodt PLC $3.27 billion 1.11 $666.60 million $4.10 8.88
AbbVie $26.71 billion 4.18 $11.57 billion $4.07 17.19

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

Volatility and Risk

Mallinckrodt PLC has a beta of 1.52, indicating that its stock price is 52% more volatile than the S&P 500. Comparatively, AbbVie has a beta of 1.5, indicating that its stock price is 50% more volatile than the S&P 500.

Insider and Institutional Ownership

94.7% of Mallinckrodt PLC shares are held by institutional investors. Comparatively, 67.7% of AbbVie shares are held by institutional investors. 0.8% of Mallinckrodt PLC shares are held by company insiders. Comparatively, 0.2% of AbbVie shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Profitability

This table compares Mallinckrodt PLC and AbbVie’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Mallinckrodt PLC 12.64% 15.28% 5.20%
AbbVie 24.77% 150.27% 12.52%

About Mallinckrodt PLC

Mallinckrodt public limited company develops, manufactures, markets and distributes branded and generic specialty pharmaceutical products and therapies. The Company focuses on various therapeutic areas, such as autoimmune and rare disease specialty areas, including neurology, rheumatology, nephrology, ophthalmology and pulmonology; immunotherapy and neonatal critical care respiratory therapies; analgesics and hemostasis products, and central nervous system drugs. Its segments include Specialty Brands and Specialty Generics. The Specialty Brands segment produces and markets branded pharmaceutical products and therapies. The Specialty Generics segment produces and markets specialty generic pharmaceuticals and active pharmaceutical ingredient (API) consisting of biologics, medicinal opioids, synthetic controlled substances, acetaminophen and other active ingredients. Its product portfolio includes Acthar, Inomax, Ofirmev, Therakos immunotherapy, Hemostasis products and StrataGraft.

About AbbVie

AbbVie Inc. (AbbVie) is a research-based biopharmaceutical company. The Company is engaged in the discovery, development, manufacture and sale of a range of pharmaceutical products. Its products are focused on treating conditions, such as chronic autoimmune diseases in rheumatology, gastroenterology and dermatology; oncology, including blood cancers; virology, including hepatitis C virus (HCV) and human immunodeficiency virus (HIV); neurological disorders, such as Parkinson’s disease and multiple sclerosis; metabolic diseases, including thyroid disease and complications associated with cystic fibrosis, and other serious health conditions. It offers products in various categories, including HUMIRA (adalimumab), Oncology products, Virology Products, Additional Virology products, Metabolics/Hormones products, Endocrinology products and other products, which include Duopa and Duodopa (carbidopa and levodopa), Anesthesia products and ZINBRYTA (daclizumab).

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