Dissecting the Numbers for Mylan N.V. (MYL) and Analog Devices, Inc. (ADI)

Mylan N.V. (NASDAQ:MYL) shares are up more than 0.09% this year and recently decreased -1.01% or -$0.43 to settle at $42.35. Analog Devices, Inc. (NASDAQ:ADI), on the other hand, is up 6.32% year to date as of 03/13/2018. It currently trades at $94.66 and has returned 2.97% during the past week.

Mylan N.V. (NASDAQ:MYL) and Analog Devices, Inc. (NASDAQ:ADI) are the two most active stocks in the market based on today’s trading volumes. Investor interest in the two stocks is clearly very high, but which is the better investment? To answer this question, we will compare the two companies across growth, profitability, risk, and valuation metrics, and also examine their analyst ratings and insider activity trends.


Companies that can increase earnings at a high compound rate over time are attractive to investors. Analysts expect MYL to grow earnings at a 6.90% annual rate over the next 5 years. Comparatively, ADI is expected to grow at a 8.26% annual rate. All else equal, ADI’s higher growth rate would imply a greater potential for capital appreciation.

Profitability and Returns

A high growth rate isn’t necessarily valuable to investors. In fact, companies that overinvest in low return projects just to achieve a high growth rate can actually destroy shareholder value. Profitability and returns are a measure of the quality of a company’s business and its growth opportunities. We’ll use EBITDA margin and Return on Investment (ROI) to measure this., compared to an EBITDA margin of 34.36% for Analog Devices, Inc. (ADI). MYL’s ROI is 4.70% while ADI has a ROI of 5.30%. The interpretation is that ADI’s business generates a higher return on investment than MYL’s.

Cash Flow 

If there’s one thing investors care more about than earnings, it’s cash flow. MYL’s free cash flow (“FCF”) per share for the trailing twelve months was +0.93. Comparatively, ADI’s free cash flow per share was +1.10. On a percent-of-sales basis, MYL’s free cash flow was 4.02% while ADI converted 7.97% of its revenues into cash flow. This means that, for a given level of sales, ADI is able to generate more free cash flow for investors.

Liquidity and Financial Risk

Analysts look at liquidity and leverage ratios to assess how easily a company can cover its liabilities. MYL has a current ratio of 1.10 compared to 1.80 for ADI. This means that ADI can more easily cover its most immediate liabilities over the next twelve months. MYL’s debt-to-equity ratio is 1.11 versus a D/E of 0.72 for ADI. MYL is therefore the more solvent of the two companies, and has lower financial risk.


MYL trades at a forward P/E of 7.22, a P/B of 1.70, and a P/S of 1.81, compared to a forward P/E of 16.53, a P/B of 3.38, and a P/S of 6.12 for ADI. MYL is the cheaper of the two stocks on an earnings, book value and sales basis. Given that earnings are what matter most to investors, analysts tend to place a greater weight on the P/E.

Analyst Price Targets and Opinions

Just because a stock is cheaper doesn’t mean there’s more value to be had. In order to assess value we need to compare the current price to where it’s likely to trade in the future. MYL is currently priced at a -14.65% to its one-year price target of 49.62. Comparatively, ADI is -7.86% relative to its price target of 102.73. This suggests that MYL is the better investment over the next year.

The average investment recommendation on a scale of 1 to 5 (1 being a strong buy, 3 a hold, and 5 a sell) is 2.10 for MYL and 2.10 for ADI, which implies that analysts are equally bullish on their outlook for the two stocks.

Risk and Volatility

No discussion on value is complete without taking into account risk. Analysts use a stock’s beta, which measures the volatility of a stock compared to the overall market, to measure systematic risk. A stock with a beta above 1 is more volatile than the market. Conversely, a beta below 1 implies a below average level of risk. MYL has a beta of 1.39 and ADI’s beta is 1.25. ADI’s shares are therefore the less volatile of the two stocks.

Insider Activity and Investor Sentiment

Short interest, or the percentage of a stock’s tradable shares currently being shorted, is another metric investors use to get a pulse on sentiment.MYL has a short ratio of 3.24 compared to a short interest of 2.81 for ADI. This implies that the market is currently less bearish on the outlook for ADI.


Analog Devices, Inc. (NASDAQ:ADI) beats Mylan N.V. (NASDAQ:MYL) on a total of 8 of the 14 factors compared between the two stocks. ADI is more profitable, generates a higher return on investment, has higher cash flow per share, has a higher cash conversion rate, higher liquidity and has lower financial risk. In terms of valuation, MYL is the cheaper of the two stocks on an earnings, book value and sales basis, Finally, ADI has better sentiment signals based on short interest.

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