Which Is A Better Pick: JNJ Stock Or AbbVie?

Core Viewpoint - AbbVie stock (NYSE: ABBV) is considered a better pharmaceutical investment compared to Johnson & Johnson stock (NYSE: JNJ) due to better future prospects driven by new drugs gaining market share, despite both trading at 15x forward expected earnings [1][15]. Group 1: Stock Performance - AbbVie stock has increased by 85% from $90 in January 2021 to around $165, while JNJ has only risen about 10% during the same period [2]. - AbbVie's returns were 32% in 2021, 24% in 2022, and 0% in 2023, whereas JNJ's returns were 11%, 6%, and -9% respectively [2]. Group 2: Revenue Growth - JNJ's revenue grew by 11.4% from $78.7 billion in 2021 to $87.7 billion, while AbbVie's revenue declined by 1.2% from $56.2 billion to $55.5 billion [4]. - JNJ's pharmaceutical segment growth is driven by drugs like Darzalex and Stelara, while AbbVie faces revenue loss due to Humira's market exclusivity loss [5][7]. Group 3: Profitability - JNJ's operating margin improved from 26.6% in 2021 to 27.5% in 2023, while AbbVie's margin declined from 31.9% to 23.5% [11]. - JNJ's adjusted earnings per share for 2024 are projected at $9.91, down from $10.05, while AbbVie expects adjusted earnings per share between $10.90 and $10.94, compared to $11.11 in 2023 [12][13]. Group 4: Financial Position - JNJ has a better financial position with 10% debt as a percentage of equity compared to AbbVie's 24%, and JNJ's cash as a percentage of assets is 11% versus AbbVie's 5% [14]. Group 5: Future Outlook - Both AbbVie and JNJ are expected to see sales growth at a mid-single-digit average annual rate over the next few years [10]. - AbbVie is anticipated to grow its sales and earnings despite Humira's patent loss, with peak sales for Rinvoq and Skyrizi expected to reach $32 billion [18].