AbbVie vs Johnson & Johnson Which Is a Better Investment?

AbbVie and Johnson & Johnson are two leading pharmaceutical companies with a strong presence in the healthcare industry. Both companies have a track record of developing innovative drugs and treatments, resulting in steady growth in their stock prices. While AbbVie is known for its blockbuster drug Humira, Johnson & Johnson has a diverse portfolio of products across various healthcare segments. Investors often compare the performance of these two stocks to make informed decisions about their investment strategies in the healthcare sector.

AbbVie or Johnson & Johnson?

When comparing AbbVie and Johnson & Johnson, 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 Johnson & Johnson.

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 3.53%, while Johnson & Johnson has a dividend yield of 3.29%. 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, Johnson & Johnson reports a 5-year dividend growth of 5.83% year and a payout ratio of 79.71%.

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 60.67 and Johnson & Johnson's P/E ratio at 24.46. 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 51.52 while Johnson & Johnson's P/B ratio is 5.12.

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 Johnson & Johnson's is 0.10%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with AbbVie's ROE at 65.72% and Johnson & Johnson's ROE at 20.94%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $173.83 for AbbVie and $148.33 for Johnson & Johnson. Over the past year, AbbVie's prices ranged from $150.17 to $207.32, with a yearly change of 38.06%. Johnson & Johnson's prices fluctuated between $143.13 and $168.85, with a yearly change of 17.97%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.