Is Merck Stock A Better Pick Over ABBV?

We believe that AbbVie stock (NYSE: ABBV) is a better pick than its industry peer, Merck stock (NYSE: MRK). MRK stock trades at a slightly higher valuation of 4.8x trailing revenues, compared to 4.2x for AbbVie
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, and this valuation gap will likely narrow over time in favor of AbbVie, in our view. Looking at stock returns, Merck stock has fared better than AbbVie, and both have underperformed the broader indices. While MRK is down 2% this year, ABBV is down 16%, and the S&P500 index is up 10%. There is more to the comparison, and in the sections below, we discuss why we believe ABBV stock will offer higher returns than MRK stock in the next three years. We compare a slew of factors, such as historical revenue growth, returns, and valuation, in an interactive dashboard analysis of Merck vs. AbbVie: Which Stock Is A Better Bet? Parts of the analysis are summarized below.

1. AbbVie’s Revenue Growth Is Better