Mallinckrodt PLC (NYSE: MNK) and Check-Cap (NASDAQ:CHEK) are both medical companies, but which is the superior stock? We will compare the two businesses based on the strength of their analyst recommendations, profitability, institutional ownership, dividends, earnings, valuation and risk.

Valuation and Earnings

This table compares Mallinckrodt PLC and Check-Cap’s gross revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio EBITDA Earnings Per Share Price/Earnings Ratio
Mallinckrodt PLC $3.27 billion 0.94 $666.60 million $4.10 7.52
Check-Cap N/A N/A -$9.62 million ($0.59) -2.42

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

Profitability

This table compares Mallinckrodt PLC and Check-Cap’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%
Check-Cap N/A -98.88% -80.97%

Risk & Volatility

Mallinckrodt PLC has a beta of 1.51, suggesting that its share price is 51% more volatile than the S&P 500. Comparatively, Check-Cap has a beta of -0.35, suggesting that its share price is 135% less volatile than the S&P 500.

Institutional & Insider Ownership

97.7% of Mallinckrodt PLC shares are owned by institutional investors. Comparatively, 19.3% of Check-Cap shares are owned by institutional investors. 0.5% of Mallinckrodt PLC shares are owned by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock will outperform the market over the long term.

Analyst Recommendations

This is a breakdown of current recommendations and price targets for Mallinckrodt PLC and Check-Cap, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Mallinckrodt PLC 0 4 13 0 2.76
Check-Cap 0 0 3 0 3.00

Mallinckrodt PLC currently has a consensus price target of $59.97, indicating a potential upside of 94.58%. Check-Cap has a consensus price target of $6.00, indicating a potential upside of 319.58%. Given Check-Cap’s stronger consensus rating and higher possible upside, analysts plainly believe Check-Cap is more favorable than Mallinckrodt PLC.

Summary

Mallinckrodt PLC beats Check-Cap on 10 of the 12 factors compared between the two stocks.

Mallinckrodt PLC Company Profile

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.

Check-Cap Company Profile

Check-Cap Ltd. (Check-Cap) is a clinical-stage medical diagnostics company. The Company is engaged in the development of an ingestible imaging capsule that utilizes low-dose X-rays for the detection and imaging of colonic polyps and colorectal cancers, or CRC. The Company’s system consists of main components, such as ingestible scanning capsule; Capsule Positioning System (CPS), a recorder worn on the patient’s back, and a personal computer (PC)-based work station for data reconstruction and image processing. The Company’s scanning capsule will be swallowed and propelled by natural motility through the gastrointestinal tract and excreted naturally with no need for retrieval for data collection. Its scanning capsule employs low-dose X-rays, which allow the system to image the interior lining of the colon even when surrounded by intestinal content. Its capsule transmits information to a receiving device worn on the patient’s body that stores the information for off-line analysis.

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