Reviewing Novo Nordisk A/S (NYSE:NVO) and AbbVie (NYSE:ABBV)

Novo Nordisk A/S (NYSE:NVO) and AbbVie (NYSE:ABBV) are both large-cap medical companies, but which is the superior stock? We will compare the two companies based on the strength of their profitability, risk, analyst recommendations, dividends, earnings, institutional ownership and valuation.

Analyst Ratings

This is a breakdown of recent ratings for Novo Nordisk A/S and AbbVie, as provided by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Novo Nordisk A/S	2	5	3	1	2.27
AbbVie	0	8	16	3	2.81

Novo Nordisk A/S currently has a consensus target price of $112.00, indicating a potential upside of 56.28%. AbbVie has a consensus target price of $211.29, indicating a potential upside of 11.07%. Given Novo Nordisk A/S’s higher possible upside, research analysts clearly believe Novo Nordisk A/S is more favorable than AbbVie.

Risk and Volatility

Novo Nordisk A/S has a beta of 0.64, meaning that its share price is 36% less volatile than the S&P 500. Comparatively, AbbVie has a beta of 0.48, meaning that its share price is 52% less volatile than the S&P 500.

Profitability

This table compares Novo Nordisk A/S and AbbVie’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Novo Nordisk A/S	34.52%	80.94%	24.23%
AbbVie	7.31%	412.03%	13.11%

Earnings and Valuation

This table compares Novo Nordisk A/S and AbbVie”s revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Novo Nordisk A/S	$42.12 billion	7.60	$14.64 billion	$3.38	21.20
AbbVie	$57.37 billion	5.86	$4.28 billion	$2.35	80.94

Novo Nordisk A/S has higher earnings, but lower revenue than AbbVie. Novo Nordisk A/S is trading at a lower price-to-earnings ratio than AbbVie, indicating that it is currently the more affordable of the two stocks.

Institutional & Insider Ownership

11.5% of Novo Nordisk A/S shares are held by institutional investors. Comparatively, 70.2% of AbbVie shares are held by institutional investors. 0.1% of Novo Nordisk A/S shares are held by company insiders. Comparatively, 0.3% of AbbVie shares are held by company insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a company will outperform the market over the long term.

Dividends

Novo Nordisk A/S pays an annual dividend of $1.64 per share and has a dividend yield of 2.3%. AbbVie pays an annual dividend of $6.56 per share and has a dividend yield of 3.4%. Novo Nordisk A/S pays out 48.5% of its earnings in the form of a dividend. AbbVie pays out 279.1% of its earnings in the form of a dividend, suggesting it may not have sufficient earnings to cover its dividend payment in the future. AbbVie has raised its dividend for 53 consecutive years. AbbVie is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Summary

AbbVie beats Novo Nordisk A/S on 10 of the 18 factors compared between the two stocks.

About Novo Nordisk A/S

Novo Nordisk A/S, together with its subsidiaries, engages in the research and development, manufacture, and distribution of pharmaceutical products in Europe, the Middle East, Africa, Mainland China, Hong Kong, Taiwan, North America, and internationally. It operates in two segments, Diabetes and Obesity Care, and Rare Disease. The Diabetes and Obesity care segment provides products for diabetes, obesity, cardiovascular, and other emerging therapy areas. The Rare Disease segment offers products in the areas of rare blood disorders, rare endocrine disorders, and hormone replacement therapy. The company also provides insulin pens, growth hormone pens, and injection needles. In addition, it offers smart solutions for diabetes treatment, such as smart insulin pens and Dose Check, an insulin dose guidance application. The company has a collaboration agreement with Aspen Pharmaceuticals to produce insulin products; and with Korro Bio, Inc. for the discovery and development of new genetic medicines to treat cardiometabolic diseases. Novo Nordisk A/S was founded in 1923 and is headquartered in Bagsvaerd, Denmark.

About AbbVie

AbbVie Inc. discovers, develops, manufactures, and sells pharmaceuticals worldwide. The company offers Humira, an injection for autoimmune and intestinal Behçet's diseases, and pyoderma gangrenosum; Skyrizi to treat moderate to severe plaque psoriasis, psoriatic disease, and Crohn's disease; Rinvoq to treat rheumatoid and psoriatic arthritis, ankylosing spondylitis, atopic dermatitis, axial spondyloarthropathy, ulcerative colitis, and Crohn's disease; Imbruvica for the treatment of adult patients with blood cancers; Epkinly to treat lymphoma; Elahere to treat cancer; and Venclexta/Venclyxto to treat blood cancers. It also provides facial injectables, plastics and regenerative medicine, body contouring, and skincare products; botox therapeutic; Vraylar for depressive disorder; Duopa and Duodopa to treat advanced Parkinson's disease; Ubrelvy for the acute treatment of migraine in adults; and Qulipta for episodic and chronic migraine. In addition, the company offers Ozurdex for eye diseases; Lumigan/Ganfort and Alphagan/Combigan for the reduction of elevated intraocular pressure in patients with open angle glaucoma or ocular hypertension; Restasis to increase tear production; and other eye care products. Further, it provides Mavyret/Maviret to treat chronic hepatitis C virus genotype 1-6 infection; Creon, a pancreatic enzyme therapy; Lupron to treat advanced prostate cancer, endometriosis and central precocious puberty, and patients with anemia caused by uterine fibroids; Linzess/Constella to treat irritable bowel syndrome with constipation and chronic idiopathic constipation; and Synthroid for hypothyroidism. It has collaborations with Calico Life Sciences LLC; REGENXBIO Inc.; Janssen Biotech, Inc.; and Genentech, Inc., as well as collaboration with Tentarix Biotherapeutics, LP to develop conditionally-active and multi-specific biologics for oncology and immunology. The company was incorporated in 2012 and is headquartered in North Chicago, Illinois.