Abbott Laboratories (ABT) and Amgen (AMGN) Financial Comparison

Amgen (NASDAQ: AMGN) and Abbott Laboratories (NYSE:ABT) are both large-cap healthcare companies, but which is the better investment? We will compare the two companies based on the strength of their risk, institutional ownership, analyst recommendations, earnings, profitability, valuation and dividends.

Profitability

This table compares Amgen and Abbott Laboratories’ net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Amgen 35.54% 29.90% 11.80%
Abbott Laboratories 8.37% 13.98% 6.09%

Risk & Volatility

Amgen has a beta of 1.36, indicating that its share price is 36% more volatile than the S&P 500. Comparatively, Abbott Laboratories has a beta of 1.06, indicating that its share price is 6% more volatile than the S&P 500.

Dividends

Amgen pays an annual dividend of $4.60 per share and has a dividend yield of 2.4%. Abbott Laboratories pays an annual dividend of $1.12 per share and has a dividend yield of 1.9%. Amgen pays out 41.6% of its earnings in the form of a dividend. Abbott Laboratories pays out 88.2% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. Amgen has increased its dividend for 45 consecutive years and Abbott Laboratories has increased its dividend for 7 consecutive years. Amgen is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Ratings

This is a breakdown of current ratings and target prices for Amgen and Abbott Laboratories, as reported by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Amgen 0 11 9 0 2.45
Abbott Laboratories 0 3 13 0 2.81

Amgen currently has a consensus target price of $190.56, indicating a potential upside of 0.67%. Abbott Laboratories has a consensus target price of $61.27, indicating a potential upside of 3.30%. Given Abbott Laboratories’ stronger consensus rating and higher probable upside, analysts clearly believe Abbott Laboratories is more favorable than Amgen.

Institutional and Insider Ownership

78.5% of Amgen shares are held by institutional investors. Comparatively, 71.2% of Abbott Laboratories shares are held by institutional investors. 0.2% of Amgen shares are held by insiders. Comparatively, 0.8% of Abbott Laboratories shares are held by insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a company is poised for long-term growth.

Valuation & Earnings

This table compares Amgen and Abbott Laboratories’ revenue, earnings per share (EPS) and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Amgen $22.99 billion 5.98 $7.72 billion $11.07 17.10
Abbott Laboratories $20.85 billion 4.95 $1.40 billion $1.27 46.70

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

Summary

Amgen beats Abbott Laboratories on 12 of the 17 factors compared between the two stocks.

Amgen Company Profile

Amgen Inc. is a biotechnology company. The Company discovers, develops, manufactures and delivers various human therapeutics. It operates in human therapeutics segment. Its marketed products portfolio includes Neulasta (pegfilgrastim); erythropoiesis-stimulating agents (ESAs), such as Aranesp (darbepoetin alfa) and EPOGEN (epoetin alfa); Sensipar/Mimpara (cinacalcet); XGEVA (denosumab); Prolia (denosumab); NEUPOGEN (filgrastim), and other marketed products, such as KYPROLIS (carfilzomib), Vectibix (panitumumab), Nplate (romiplostim), Repatha (evolocumab), BLINCYTO (blinatumomab), IMLYGIC (talimogene laherparepvec) and Corlanor (ivabradine). It focuses on human therapeutics for the treatment of serious illness in the areas of oncology/hematology, cardiovascular disease and neuroscience. Its product candidates in Phase III include Erenumab for episodic migraine, Aranesp for myelodysplastic syndromes, BLINCYTO for acute lymphoblastic leukemia and IMLYGIC for metastatic melanoma.

Abbott Laboratories Company Profile

Abbott Laboratories is engaged in the discovery, development, manufacture and sale of a range of healthcare products. The Company operates through four segments: Established Pharmaceutical Products, Diagnostic Products, Nutritional Products and Vascular Products. Its Established Pharmaceutical Products include a range of branded generic pharmaceuticals manufactured around the world and marketed and sold outside the United States. Its Diagnostic Products include a range of diagnostic systems and tests. Its Nutritional Products include a range of pediatric and adult nutritional products. Its Company’s Vascular Products include a range of coronary, endovascular, vessel closure and structural heart devices for the treatment of vascular disease. The Company, through St. Jude Medical, Inc., also offers products, such as rhythm management products, electrophysiology products, heart failure related products, vascular products, structural heart products and neuromodulation products.

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