GSK vs AbbVie Which Is a Smarter Choice?

GSK and AbbVie are two major players in the pharmaceutical industry, each with a strong presence in the global market. GlaxoSmithKline (GSK) is a British multinational pharmaceutical company known for its innovative medicines and vaccines, while AbbVie is an American biopharmaceutical company specializing in research and development of advanced therapies. Investors often compare the stocks of these two companies, considering factors such as financial performance, pipeline of drugs, and potential for growth in their respective markets.

GSK or AbbVie?

When comparing GSK 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 GSK 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. GSK has a dividend yield of 4.15%, while AbbVie has a dividend yield of 4.44%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. GSK reports a 5-year dividend growth of -4.37% year and a payout ratio of 95.58%. 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 GSK P/E ratio at 22.95 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. GSK P/B ratio is 4.11 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, GSK has seen a 5-year revenue growth of -0.05%, while AbbVie's is 0.45%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with GSK's ROE at 18.08% and AbbVie's ROE at 64.09%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $36.31 for GSK and $172.70 for AbbVie. Over the past year, GSK's prices ranged from $34.29 to $45.93, with a yearly change of 33.95%. 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.