AbbVie vs. Bristol-Myers Squibb: Which Healthcare Stock Is a Better Buy in 2026?

Choosing between AbbVie (NYSE:ABBV) and Bristol-Myers Squibb (NYSE:BMY) requires weighing high-growth immunology assets against deep value as both drugmakers navigate a shifting landscape of patent expirations and drug pricing reforms.

AbbVie focuses on specialty immunology and aesthetics, pivoting past its Humira legacy. Bristol-Myers Squibb emphasizes oncology and cardiovascular health while transitioning to its next-generation pipeline. Both companies are major players in the pharmaceutical industry, appealing to income-seeking investors through consistent dividends and stable cash flows.

The case for AbbVie

AbbVie is a global biopharmaceutical company that delivers innovative medicines across roughly 180 countries. The company is a major player among pharmaceutical stocks, maintaining manufacturing facilities in roughly 20 countries. Its primary U.S. sales are concentrated among three major wholesale distributors, including McKesson Corporation, Cardinal Health, and Cencora, though no single wholesaler accounted for more than 43% of total U.S. gross revenues in 2025.

In FY 2025, revenue reached nearly $61.2 billion, reflecting growth of approximately 8.6% compared to the prior year. The company reported net income of close to $4.2 billion during this period. This growth was largely supported by the continued expansion of newer drug labels, which have helped offset the revenue erosion from older products facing competition.

As of its December 2025 balance sheet, the debt-to-equity ratio is -21.1x, which means total liabilities exceed shareholder equity. The current ratio, which measures the ability to cover short-term obligations with short-term assets, is approximately 0.7x. Free cash flow, calculated as cash from operations minus capital expenditures, was nearly $17.8 billion for the year.

The case for Bristol-Myers Squibb

Bristol-Myers Squibb is a global biopharmaceutical leader focused on serious diseases in oncology, hematology, and cardiovascular health. The company sells its products to wholesalers, specialty pharmacies, and government agencies worldwide. In the U.S., the company maintains distribution service agreements with nearly all direct wholesaler customers, and these agreements are currently set to expire in June 2027.

In FY 2025, revenue reached close to $48.2 billion, representing a slight decrease of roughly 0.2% over the previous year. Despite the flat revenue growth, the company achieved net income of approximately $7.1 billion. This result represents a significant recovery from the prior year, when the company recorded a substantial net loss due to specific one-time charges.

As of the December 2025 balance sheet, the debt-to-equity ratio is roughly 2.6x, comparing total debt to the value of shareholder equity. The current ratio is approximately 1.3x, suggesting the company maintains a solid cushion to meet its upcoming financial obligations. Free cash flow for the year was nearly $12.8 billion, providing ample capital for dividends and further research.

Risk profile comparison

AbbVie faces significant risks from patent expirations and the rise of biosimilar competition for its key immunology drugs. Revenue concentration is a factor, as Skyrizi and Rinvoq together accounted for approximately 42% of 2025 net revenues. Additionally, the company faces pricing pressure from the Inflation Reduction Act, which allows government-set pricing on products like Imbruvica and Botox, potentially impacting future revenue. Competition from Pfizer also remains a constant factor in the specialty medicine market.

Bristol-Myers Squibb is contending with the expected loss of market exclusivity for blockbuster drugs like Eliquis and Opdivo, which could lead to significant revenue declines. The company also faces global pricing and reimbursement constraints that reduce its pricing flexibility. Success depends heavily on the continuous flow of new products, and any setbacks in clinical trials or regulatory delays could hurt long-term growth. The company also competes for market share with Merck in the highly competitive oncology space.

Valuation comparison

Bristol-Myers Squibb offers a much lower Forward P/E and P/S ratio than AbbVie, suggesting the market expects slower growth from its current portfolio.

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 AbbVie, although Bristol-Myers Squibb deserves credit for making progress with newer growth brands gaining traction and a pipeline with some interesting candidates. After years of patent losses and pricing pressure, the stock has fallen far enough that expectations are about as low as they can get. So for investors comfortable with a longer wait, there is a recovery case to be made.

But BMS is still in the thick of a patent cliff that is expected to weigh on revenue for the foreseeable future, and drug pricing reforms add another layer of uncertainty that is hard to plan around. AbbVie is running a more focused operation and delivering results that back it up. Skyrizi and Rinvoq are each growing faster than almost anything else in the pharmaceutical industry right now, and the Humira biosimilar headwind is largely in the rearview mirror.

AbbVie also has a neuroscience portfolio that is accelerating in ways that add a second major growth engine to the story. On top of that, the company raised its full-year outlook for the second time this year and pays one of the more attractive dividends in healthcare. For a long-term investor, AbbVie's growth trajectory and dividend make it the stronger pick right now.

Sara Appino has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends AbbVie, Bristol Myers Squibb, Merck, and Pfizer. The Motley Fool has a disclosure policy.