AbbVie vs GSK Which Is More Favorable?

AbbVie and GlaxoSmithKline (GSK) are two pharmaceutical giants that are constantly being compared in the stock market. AbbVie is known for its blockbuster drug Humira, while GSK boasts a diverse portfolio of pharmaceuticals, vaccines, and consumer healthcare products. Investors often weigh the market performance, profitability, pipeline of drugs, and potential risks of investing in these companies. Understanding the financial health and growth prospects of AbbVie and GSK stocks is crucial for making informed investment decisions in the healthcare sector.

AbbVie or GSK?

When comparing AbbVie and GSK, different investors may prioritize various metrics based on their investment strategies and goals. So, ask yourself what type of investor you are. This will guide you in determining which metrics are most important for your investment decision between AbbVie and GSK.

Dividend Investors:

Dividend investors look for stable and growing income streams, using dividend metrics to assess potential investments. A company's dividend yield essentially measures the size of its dividend relative to the total market value of the company. AbbVie has a dividend yield of 3.58%, while GSK has a dividend yield of 4.59%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. AbbVie reports a 5-year dividend growth of 10.52% year and a payout ratio of 212.79%. On the other hand, GSK reports a 5-year dividend growth of -4.37% year and a payout ratio of 95.58%.

Value Investors:

Value investors focus on financial metrics to determine a stock's intrinsic value compared to its market value. The Price-to-Earnings (P/E) Ratio links stock price to a company's earnings per share, with AbbVie P/E ratio at 59.88 and GSK's P/E ratio at 21.85. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. AbbVie P/B ratio is 50.84 while GSK's P/B ratio is 3.92.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, AbbVie has seen a 5-year revenue growth of 0.45%, while GSK's is -0.53%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with AbbVie's ROE at 65.72% and GSK's ROE at 18.08%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $172.39 for AbbVie and $33.75 for GSK. Over the past year, AbbVie's prices ranged from $151.29 to $207.32, with a yearly change of 37.03%. GSK's prices fluctuated between $32.83 and $45.93, with a yearly change of 39.90%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.