Critical Comparison: Abbott Laboratories (ABT) versus Amgen (AMGN)

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

Valuation and Earnings

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

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Abbott Laboratories $20.85 billion 4.92 $1.40 billion $1.21 48.69
Amgen $22.99 billion 5.79 $7.72 billion $11.07 16.57

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.

Analyst Recommendations

This is a summary of recent ratings and recommmendations for Abbott Laboratories and Amgen, as reported by MarketBeat.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Abbott Laboratories 0 2 13 0 2.87
Amgen 0 11 9 0 2.45

Abbott Laboratories currently has a consensus target price of $61.27, suggesting a potential upside of 3.98%. Amgen has a consensus target price of $190.56, suggesting a potential upside of 3.91%. Given Abbott Laboratories’ stronger consensus rating and higher probable upside, research analysts clearly believe Abbott Laboratories is more favorable than Amgen.

Dividends

Abbott Laboratories pays an annual dividend of $1.06 per share and has a dividend yield of 1.8%. Amgen pays an annual dividend of $4.60 per share and has a dividend yield of 2.5%. Abbott Laboratories pays out 87.6% 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 pays out 41.6% of its earnings in the form of a dividend. Abbott Laboratories has raised its dividend for 45 consecutive years and Amgen has raised its dividend for 7 consecutive years. Amgen is clearly the better dividend stock, given its higher yield and lower payout ratio.

Profitability

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

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

Insider and Institutional Ownership

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

Risk and Volatility

Abbott Laboratories has a beta of 1.55, suggesting that its share price is 55% more volatile than the S&P 500. Comparatively, Amgen has a beta of 1.36, suggesting that its share price is 36% more volatile than the S&P 500.

Summary

Amgen beats Abbott Laboratories on 10 of the 17 factors compared between the two stocks.

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.

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.

Receive News & Ratings for Abbott Laboratories Daily - Enter your email address below to receive a concise daily summary of the latest news and analysts' ratings for Abbott Laboratories and related companies with MarketBeat.com's FREE daily email newsletter.

Comments

Leave a Reply


share news on Facebook
tweet this investment news
share on linkedin
share on StockTwits
share on Google Plus
share on reddit