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

Risk & Volatility

AbbVie has a beta of 1.51, meaning that its share price is 51% more volatile than the S&P 500. Comparatively, Mallinckrodt PLC has a beta of 1.52, meaning that its share price is 52% more volatile than the S&P 500.

Analyst Recommendations

This is a summary of current ratings and target prices for AbbVie and Mallinckrodt PLC, as provided by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
AbbVie 0 7 5 1 2.54
Mallinckrodt PLC 0 2 15 0 2.88

AbbVie presently has a consensus target price of $74.58, suggesting a potential upside of 3.98%. Mallinckrodt PLC has a consensus target price of $76.38, suggesting a potential upside of 63.91%. Given Mallinckrodt PLC’s stronger consensus rating and higher possible upside, 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 3.6%. Mallinckrodt PLC does not pay a dividend. AbbVie pays out 66.3% of its earnings in the form of a dividend. AbbVie has increased its dividend for 44 consecutive years.

Insider & Institutional Ownership

68.1% of AbbVie shares are owned by institutional investors. Comparatively, 96.4% of Mallinckrodt PLC shares are owned by institutional investors. 0.2% of AbbVie shares are owned by insiders. Comparatively, 0.8% of Mallinckrodt PLC shares are owned by insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a stock is poised for long-term growth.

Earnings & Valuation

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

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
AbbVie $26.22 billion 4.35 $11.15 billion $3.86 18.58
Mallinckrodt PLC $3.31 billion 1.40 $744.30 million $5.28 8.83

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.

Profitability

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

Net Margins Return on Equity Return on Assets
AbbVie 24.07% 148.83% 12.18%
Mallinckrodt PLC 16.01% 16.33% 5.48%

Summary

AbbVie beats Mallinckrodt PLC on 9 of the 17 factors compared between the two stocks.

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).

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.

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