Do Fundamentals Favor Mylan?

With shares of Mylan (NASDAQ:MYL) trading at around $30.73, is MYL an OUTPERFORM, WAIT AND SEE or STAY AWAY? Let’s analyze the stock with the relevant sections of our CHEAT SHEET investing framework:

C = Catalyst for the Stock’s Movement

Numbers can lie, but they’re still more honest than humans. Therefore, we’re going to take a look at Mylan’s fundamentals compared to the fundamentals of its competitors. However, prior to doing so, a brief introduction for Mylan should be offered. Mylan is a global generic drug company. Generic drugs can be prescribed under a chemical name without specifying a brand name or company name. Generic drugs can also be as much as 85 percent cheaper than brand name drugs. Generic drugs usually stay on the market for approximately 10 to 14 years.

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In this article, we’ll compare Mylan, Actavis (ACT), and Teva Pharmaceutical Industrials Limited (NYSE:TEVA). Prior to comparing stats, it’s important to note than these companies differ in size. However, Mylan and Actavis are very close in size. Teva has a market cap of $34.29 billion, Mylan has a market cap of $12.08 billion, and Actavis has a market cap of $11.29 billion.

MYL

ACT

TEVA

Trailing P/E

20.22

115.21

17.85

ROE

18.74%

2.65%

8.45%

Operating Margin

19.70%

11.98%

21.24%

Dividend Yield

None

None

2.70%

Operating Cash Flow

$949.02 Million

$665.80 Million

$4.57 Billion

 

As you can see from the chart above, Mylan and Teva offer better values than Actavis. If you’re looking for a dividend play, then Teva will be your only option out of the three companies listed here.

Let’s take a look at some more important numbers prior to forming an opinion on the stock…

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