Novartis vs AbbVie Which Is More Lucrative?

Novartis and AbbVie are two major pharmaceutical companies that are known for their innovative drug development and strong presence in the healthcare industry. Both companies are leaders in their respective markets and have shown strong performance in the stock market. Novartis, a Swiss multinational company, has a diverse portfolio of pharmaceuticals, while AbbVie, an American company, is known for its blockbuster drug, Humira. Investors often compare the performance of these two stocks to make informed decisions about their investments in the healthcare sector.

Novartis or AbbVie?

When comparing Novartis 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 Novartis 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. Novartis has a dividend yield of 7.15%, while AbbVie has a dividend yield of 4.44%. Beyond the yield itself, considering the growth and sustainability of these dividends is also crucial. Novartis reports a 5-year dividend growth of 5.40% year and a payout ratio of 43.31%. 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 Novartis P/E ratio at 12.08 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. Novartis P/B ratio is 4.91 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, Novartis has seen a 5-year revenue growth of -0.02%, while AbbVie's is 0.45%. Return on Equity (ROE) measures how effectively a company uses equity investment to generate earnings, with Novartis's ROE at 41.08% and AbbVie's ROE at 64.09%.

Retail Investors:

Retail investors often consider stock affordability and company familiarity. For example, day low prices are $105.48 for Novartis and $172.70 for AbbVie. Over the past year, Novartis's prices ranged from $92.35 to $120.92, with a yearly change of 30.94%. 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.