Comparing AbbVie (NYSE:ABBV) and Johnson & Johnson (NYSE:JNJ)

AbbVie (NYSE:ABBV) and Johnson & Johnson (NYSE:JNJ) are both large-cap medical companies, but which is the superior stock? We will contrast the two companies based on the strength of their earnings, risk, profitability, dividends, valuation, analyst recommendations and institutional ownership.

Institutional & Insider Ownership

70.2% of AbbVie shares are owned by institutional investors. Comparatively, 69.6% of Johnson & Johnson shares are owned by institutional investors. 0.1% of AbbVie shares are owned by company insiders. Comparatively, 0.2% of Johnson & Johnson shares are owned by company insiders. Strong institutional ownership is an indication that endowments, large money managers and hedge funds believe a company will outperform the market over the long term.

Profitability

This table compares AbbVie and Johnson & Johnson’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
AbbVie	7.31%	412.03%	13.11%
Johnson & Johnson	24.42%	33.46%	13.30%

Dividends

AbbVie pays an annual dividend of $6.56 per share and has a dividend yield of 3.5%. Johnson & Johnson pays an annual dividend of $5.20 per share and has a dividend yield of 3.3%. AbbVie pays out 279.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Johnson & Johnson pays out 57.8% of its earnings in the form of a dividend. AbbVie has increased its dividend for 53 consecutive years and Johnson & Johnson has increased its dividend for 64 consecutive years.

Analyst Ratings

This is a summary of recent recommendations for AbbVie and Johnson & Johnson, as provided by MarketBeat.com.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
AbbVie	0	8	16	3	2.81
Johnson & Johnson	0	11	7	2	2.55

AbbVie presently has a consensus price target of $211.29, suggesting a potential upside of 11.25%. Johnson & Johnson has a consensus price target of $170.88, suggesting a potential upside of 9.67%. Given AbbVie’s stronger consensus rating and higher probable upside, equities research analysts clearly believe AbbVie is more favorable than Johnson & Johnson.

Risk and Volatility

AbbVie has a beta of 0.48, suggesting that its share price is 52% less volatile than the S&P 500. Comparatively, Johnson & Johnson has a beta of 0.41, suggesting that its share price is 59% less volatile than the S&P 500.

Valuation & Earnings

This table compares AbbVie and Johnson & Johnson”s revenue, earnings per share (EPS) and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
AbbVie	$56.33 billion	5.96	$4.28 billion	$2.35	80.82
Johnson & Johnson	$88.82 billion	4.22	$14.07 billion	$8.99	17.33

Johnson & Johnson has higher revenue and earnings than AbbVie. Johnson & Johnson is trading at a lower price-to-earnings ratio than AbbVie, indicating that it is currently the more affordable of the two stocks.

Summary

AbbVie beats Johnson & Johnson on 10 of the 18 factors compared between the two stocks.

About AbbVie

AbbVie Inc. discovers, develops, manufactures, and sells pharmaceuticals worldwide. The company offers Humira, an injection for autoimmune and intestinal Behçet's diseases, and pyoderma gangrenosum; Skyrizi to treat moderate to severe plaque psoriasis, psoriatic disease, and Crohn's disease; Rinvoq to treat rheumatoid and psoriatic arthritis, ankylosing spondylitis, atopic dermatitis, axial spondyloarthropathy, ulcerative colitis, and Crohn's disease; Imbruvica for the treatment of adult patients with blood cancers; Epkinly to treat lymphoma; Elahere to treat cancer; and Venclexta/Venclyxto to treat blood cancers. It also provides facial injectables, plastics and regenerative medicine, body contouring, and skincare products; botox therapeutic; Vraylar for depressive disorder; Duopa and Duodopa to treat advanced Parkinson's disease; Ubrelvy for the acute treatment of migraine in adults; and Qulipta for episodic and chronic migraine. In addition, the company offers Ozurdex for eye diseases; Lumigan/Ganfort and Alphagan/Combigan for the reduction of elevated intraocular pressure in patients with open angle glaucoma or ocular hypertension; Restasis to increase tear production; and other eye care products. Further, it provides Mavyret/Maviret to treat chronic hepatitis C virus genotype 1-6 infection; Creon, a pancreatic enzyme therapy; Lupron to treat advanced prostate cancer, endometriosis and central precocious puberty, and patients with anemia caused by uterine fibroids; Linzess/Constella to treat irritable bowel syndrome with constipation and chronic idiopathic constipation; and Synthroid for hypothyroidism. It has collaborations with Calico Life Sciences LLC; REGENXBIO Inc.; Janssen Biotech, Inc.; and Genentech, Inc., as well as collaboration with Tentarix Biotherapeutics, LP to develop conditionally-active and multi-specific biologics for oncology and immunology. The company was incorporated in 2012 and is headquartered in North Chicago, Illinois.

About Johnson & Johnson

Johnson & Johnson is a holding company, which engages in the research, development, manufacture, and sale of products in the healthcare field. It operates through the Innovative Medicine and MedTech segments. The Innovative Medicine segment focuses on immunology, infectious diseases, neuroscience, oncology, cardiovascular and metabolism, and pulmonary hypertension. The MedTech segment includes a portfolio of products used in the interventional solutions, orthopaedics, surgery, and vision categories. The company was founded by Robert Wood Johnson I, James Wood Johnson, and Edward Mead Johnson Sr. in 1887 and is headquartered in New Brunswick, NJ.