Summary
Johnson & Johnson and AbbVie are two of the best performing stocks in the industry, but only one will be included in my DGI portfolio.
As we have recently seen with AbbVie, investors need to be aware of the risks within the industry which can lead to severe short-term pricing pressures.
Johnson & Johnson is old reliable within the industry, whereas AbbVie is the one trick pony currently with Humira, but posts one of the strongest drugs pipelines
This is the ultimate old versus new battle. On one side, we have old reliable in Johnson & Johnson (JNJ), who performs year in and year out with a consistently strong pipeline of new products that grow revenue. On the other side, we have the newcomer on the block or the young gun in AbbVie, inc. (ABBV), who sports the #1 selling drug in the world in Humira.
Here at Big Ticket Fund Managers, we have always been a fan of JNJ stock as a DGI portfolio building block stock, but as we recently have taken a deeper dive into ABBV, we like the risk-reward they have to offer. With the #1 selling drug in the world expected to maintain that top spot through 2023, ABBV will be able to maintain strong cash flows that will drive research and development of their loaded pipeline of products. Trading at a price-to-earnings multiple slightly below their average history, a difference of 3.5 below that of JNJ, if you have the risk tolerance, we like the long-term prospects of ABBV.
