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

Company Overview

ABBV’s market capitalization stands at 337.14 billion USD, while NVS’s is 233.24 billion USD, indicating their market valuations are broadly comparable.

With betas of 0.49 for ABBV and 0.53 for NVS, both stocks show similar sensitivity to overall market movements.

NVS is an American Depositary Receipt (ADR), allowing U.S. investors direct exposure to its non-U.S. operations. ABBV, on the other hand, is a domestic entity.

Performance Comparison

This chart compares the performance of ABBV and NVS 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 NVS. 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 80.44 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 Forward PEG ratio of 7.27 and NVS’s Forward PEG ratio of 3.05 are both considered very high. For ABBV, this elevated ratio implies its stock price may incorporate highly optimistic growth assumptions that could be challenging to realize. NVS’s very high PEG also suggests its valuation is quite rich relative to its expected earnings growth, potentially indicating overvaluation.
• ABBV’s Price-to-Book (P/B) ratio of 237.63 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 NVS offer dividend yields in a similar range (3.34% and 3.64%, respectively), indicating comparable approaches to shareholder distributions.

Financial Strength Metrics Comparison

This section evaluates the financial strength of ABBV and NVS. 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 NVS’s current ratio of 0.79 are both considered low. For ABBV, this level suggests it might encounter challenges in using its current assets to satisfy its immediate financial obligations. NVS’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.