Amgen vs AbbVie Which Should You Buy?

Amgen and AbbVie are two prominent biopharmaceutical companies in the healthcare industry, both known for their innovative products and strong market presence. Investors often compare the performance of Amgen and AbbVie stocks, analyzing factors such as revenue growth, pipeline potential, and market dynamics. While both companies have delivered solid returns to shareholders over the years, their stock prices may react differently to industry developments and macroeconomic factors. Understanding the unique strengths and challenges of each company is essential for making informed investment decisions.

Amgen or AbbVie?

When comparing Amgen and AbbVie, 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 Amgen and AbbVie.

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. Amgen has a dividend yield of 2.76%, while AbbVie has a dividend yield of 4.44%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Amgen reports a 5-year dividend growth of 10.04% year and a payout ratio of 112.70%. On the other hand, AbbVie reports a 5-year dividend growth of 10.52% year and a payout ratio of 212.79%.

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 Amgen P/E ratio at 40.85 and AbbVie's P/E ratio at 60.35. Another crucial valuation metric is the Price-to-Book (P/B) Ratio, which compares stock price with book value per share. Amgen P/B ratio is 22.96 while AbbVie's P/B ratio is 45.31.

Growth Investors:

Growth investors prioritize metrics indicative of a company's expansion potential. Focusing on top-line growth, Amgen has seen a 5-year revenue growth of 0.47%, while AbbVie's is 0.45%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Amgen's ROE at 68.49% and AbbVie's ROE at 64.09%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $321.61 for Amgen and $172.70 for AbbVie. Over the past year, Amgen's prices ranged from $260.52 to $346.85, with a yearly change of 33.14%. AbbVie's prices fluctuated between $136.30 and $207.32, with a yearly change of 52.11%. Brand recognition also plays a role, as familiarity with a company can influence investment decisions.