ABBV vs. CVS: A Head-to-Head Stock Comparison

Company Overview

ABBV’s market capitalization of 339.89 billion USD is substantially larger than CVS’s 83.93 billion USD, indicating a significant difference in their market valuations.

With betas of 0.49 for ABBV and 0.56 for CVS, both stocks show similar sensitivity to overall market movements.

Performance Comparison

This chart compares the performance of ABBV and CVS over the past year by tracking the growth of an initial $10,000 investment in each (starting one year ago).

Data is adjusted for dividends and splits.

Valuation Metrics Comparison

This section compares the market valuation of ABBV and CVS. Key takeaways regarding their valuation, when viewed within their industry context, are presented in the commentary that follows.

• ABBV’s Price-to-Earnings (P/E) ratio of 81.10 is very high. This often means that its current market price reflects high investor confidence in its future earnings potential, but it could also suggest the stock is expensive relative to its current earnings power.
• ABBV’s Price-to-Book (P/B) ratio of 239.58 is very high. This often indicates that the market values the company significantly above its net asset value, usually reflecting strong profitability, valuable intangible assets (like brand or patents), or high expectations for future growth.

Dividend Comparison

Both ABBV and CVS offer dividend yields in a similar range (3.32% and 4.01%, respectively), indicating comparable approaches to shareholder distributions.

Financial Strength Metrics Comparison

This section evaluates the financial strength of ABBV and CVS. Noteworthy observations on their financial resilience, considered from an industry perspective, are detailed in the points that follow.

• ABBV’s current ratio of 0.76 and CVS’s current ratio of 0.82 are both considered low. For ABBV, this level suggests it might encounter challenges in using its current assets to satisfy its immediate financial obligations. CVS’s low current ratio also points to potential constraints on its liquidity, meaning it could find it difficult to cover short-term liabilities with its available assets.
• ABBV’s Debt-to-Equity (D/E) ratio of 49.22 is very high. This indicates that the company is significantly financed by debt, which can amplify returns but also substantially increases its financial risk profile and vulnerability to earnings fluctuations.