Abbott Laboratories vs. Eli Lilly: Which Healthcare Stock Is a Better Buy in 2026?

Choosing between Abbott Laboratories (NYSE:ABT) and Eli Lilly (NYSE:LLY) involves weighing the steady diversification of a healthcare conglomerate against the high-velocity expansion of a pharmaceutical leader. Both companies represent different investment profiles.

Abbott operates as a diversified healthcare giant with interests ranging from infant nutrition to advanced cardiovascular devices. Eli Lilly has transformed into a powerhouse led by its breakthrough diabetes and weight-loss treatments. This comparison evaluates whether Abbott's stability or Lilly's growth trajectory is more attractive for investors today.

The case for Abbott Laboratories

Abbott Laboratories generates revenue across four main divisions including medical devices, diagnostics, nutrition, and established pharmaceuticals. The company provides essential products like the FreeStyle Libre glucose monitor and various cardiovascular tools, making it a prominent name among medical device stocks. Because Abbott maintains a vast global distribution network, it does not rely on any single customer for a material portion of its revenue.

In FY 2025, Abbott reported revenue of nearly $44.3 billion, representing growth of approximately 5.7% compared to the previous year. The company achieved net income of roughly $6.5 billion during this period. This resulted in a net margin of close to 14.7%, which measures the percentage of total sales that the company keeps as profit after all expenses.

As of its December 2025 balance sheet, Abbott maintained a debt-to-equity ratio of roughly 0.3x. This ratio compares a company's total debt to its shareholder equity, with lower numbers generally suggesting a more conservative financial structure. Its current ratio, which measures the ability to cover short-term debts with current assets, was approximately 1.6x, and it generated free cash flow of nearly $7.4 billion.

The case for Eli Lilly

Eli Lilly has centered its recent strategy on the massive demand for cardiometabolic health products. The company focuses on breakthrough treatments for obesity and diabetes, including the high-profile drugs Mounjaro and Zepbound. However, Lilly depends heavily on three major wholesalers including McKesson, Cencora, and Cardinal Health, and customer concentration like this adds a layer of risk to the business.

In FY 2025, Lilly saw its revenue surge to approximately $65.2 billion, which was a significant 44.7% increase over the prior year. This rapid expansion helped the company produce net income of roughly $20.6 billion. Lilly also reported a strong net margin of nearly 31.7% for the year, indicating a high level of profitability relative to its sales volume.

According to its December 2025 balance sheet, Lilly carried a debt-to-equity ratio of approximately 1.6x. The company's current ratio stood at roughly 1.6x, indicating it has sufficient liquidity to handle its obligations that come due within one year. Lilly also produced nearly $9.0 billion in free cash flow, which is the cash a company has left after paying for its operations and capital investments.

Risk profile comparison

Abbott continues to navigate high-profile litigation related to its infant formula products and data privacy concerns. The company also manages a complex global supply chain that is vulnerable to disruptions from equipment failures or cyber-attacks. Additionally, the recent acquisition of Exact Sciences significantly increased the company's total debt, which could limit its financial flexibility to respond to economic volatility.

Lilly faces significant pressure from government-led pricing initiatives, particularly under the Inflation Reduction Act. This legislation allows for government-set prices on major products like Jardiance and Trulicity, which could impact future revenue. Furthermore, the company faces intense competition in the weight-loss market from Novo Nordisk and other developers of biosimilar treatments that could erode its market share.

Valuation comparison

Abbott Laboratories currently trades at a significantly lower multiple of both its future earnings estimates and its total sales compared to Eli Lilly.

Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

Which stock would I buy in 2026?

I'd go with Eli Lilly, although it can’t be denied that Abbott is having a strong year in its own right. Its medical devices and cancer diagnostics businesses are growing well, it beat earnings estimates in its most recent quarter, and raised its full-year outlook. The Exact Sciences acquisition gives it a more exciting diagnostics story than it had before. For a long-term investor who values steady, diversified healthcare exposure, Abbott is a solid choice.

But Eli Lilly is operating on a totally different level right now. Revenue is growing at an extraordinary pace, driven by surging demand for Mounjaro and Zepbound across diabetes and obesity markets worldwide. The company keeps raising its full-year outlook, and its newly approved oral GLP-1 pill, Foundayo, is already reaching patients who were never candidates for injectable treatments. That expands an already enormous market even further.

Without a doubt, Abbott is a dependable long-term compounder. But if you’re a long-term investor willing to pay a premium for one of the most powerful growth stories in modern pharmaceuticals, I think Eli Lilly is the more exciting place to put your money right now.

Sara Appino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Abbott Laboratories, Eli Lilly, and Novo Nordisk. The Motley Fool recommends McKesson. The Motley Fool has a disclosure policy.