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

Healthcare investors often face a dilemma when choosing between established giants, but AbbVie (NYSE:ABBV) and Bristol Myers Squibb (NYSE:BMY) present two very different financial profiles for your consideration in 2026.

Both companies are global biopharmaceutical leaders that must constantly replace aging drugs with new innovations. AbbVie is currently focused on expanding its dominance in immunology and aesthetics, while Bristol Myers Squibb leverages a massive oncology and hematology portfolio to generate steady cash flow for its shareholders.

The case for AbbVie

According to its latest annual report for FY 2025, AbbVie centers its growth on immunology, neuroscience, and oncology. Key treatments Skyrizi and Rinvoq now drive nearly 42% of total net revenues. The company primarily sells these therapies to large wholesale distributors including McKesson Corp (NYSE:MCK), Cardinal Health Inc (NYSE:CAH), and Cencora Corp (NYSE:COR). Customer concentration like this adds a layer of risk to the business because these three companies facilitate nearly all of its U.S. pharmaceutical sales. In 2026, AbbVie also expanded its reach by completing the acquisition of Apogee Therapeutics.

In FY 2025, revenue reached approximately $61.2 billion, which was an 8.6% increase compared to the prior year. Net income for the period was roughly $4.2 billion, resulting in a net margin of about 6.9%. This percentage represents the portion of sales remaining after all costs and taxes are subtracted. Many investors look to pharmaceutical stocks like this for consistent top-line expansion even when the broader economy is volatile.

As of its December 2025 balance sheet, the debt-to-equity ratio was -21.1x, meaning total liabilities exceed shareholder equity. The current ratio, which measures the ability to pay short-term obligations with short-term assets, was approximately 0.7x. Free cash flow for FY 2025 was nearly $17.8 billion. This is the cash a company generates after accounting for the money spent to maintain or expand its asset base, such as equipment and facilities.

The case for Bristol Myers Squibb

In its latest annual report, filed for FY 2025, Bristol Myers Squibb highlights its leadership in oncology and hematology through treatments like Opdivo and Eliquis. It sells its medicines globally to a diverse mix of wholesalers, specialty pharmacies, and government agencies. The company is currently navigating complex legal waters, including a $6.7 billion lawsuit regarding its Celgene acquisition. Additionally, it is involved in a patent judgment lawsuit filed by Cytokinetics (NASDAQ:CYTK) that could impact its long-term financial planning.

During FY 2025, revenue was close to $48.2 billion, showing a slight decrease of roughly 0.2% over the previous year. Despite the flat revenue growth, net income was approximately $7.1 billion for the period. This indicates a net margin of roughly 14.6%. Net margin is a helpful metric because it shows how much of each dollar in sales actually turns into profit for the company.

As of its December 2025 balance sheet, the debt-to-equity ratio was approximately 2.6x. This ratio shows the relationship between total debt and the equity provided by shareholders. The current ratio for the same period was close to 1.3x, suggesting a comfortable cushion for meeting near-term liabilities. Free cash flow for FY 2025 reached roughly $12.8 billion, which provides the company with capital for dividends or further research and development.

Risk profile comparison

AbbVie faces significant pressure from patent expirations, most notably the loss of exclusivity for Humira and the rise of biosimilar competition. The Inflation Reduction Act also allows for government price negotiations on several of its top-selling products, including Vraylar and Botox. Furthermore, the company is highly sensitive to market dynamics for Skyrizi and Rinvoq due to its high product concentration. Complex manufacturing processes for biologics also create risks of supply disruptions or regulatory hurdles that could impact revenue.

Bristol Myers Squibb is also contending with revenue concentration and the inevitable decline of sales when blockbuster drugs like Eliquis or Opdivo lose patent protection. Pricing restrictions from government and private payers are increasing, with several key drugs already targeted for price negotiations. The company carries significant litigation risks and high debt levels from previous strategic acquisitions. Finally, competition from large rivals such as Merck & Co Inc (NYSE:MRK) and Pfizer Inc (NYSE:PFE) remains intense across the oncology and hematology markets.

Valuation comparison

Bristol Myers Squibb appears to be the value play with a much lower Forward P/E, which compares the stock price to future earnings estimates. AbbVie is more expensive but offers higher growth and a higher P/S ratio, which is the market cap divided by sales over the past twelve months.

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

Which stock would I buy in 2026?

AbbVie is buying itself growth with its recent buy of Apogee Therapeutics. Its two relatively new immunology products, Skyrizi and Rinvoq, have proven to be true growth drivers for the business, and investors are hopeful that an FDA decision on a Parkinson's treatment later this year will bode well for the company. AbbVie is expected to see screaming growth in net income this year, from $4.2 billion to $14.6 billion. Sales should grow to $67.2 billion.

Bristol Myers Squibb has made positive strides, with its newer growth brands gaining traction and some interesting candidates in the pipeline. The stock is cheap, and that seems to be for good reason. Investors have already priced in much of the upcoming difficulty, which softens the downside but does not make it an obvious buy right now. Bristol Myers Squibb's timeline for recovery is hard to predict.

Revenue for the current fiscal year should edge up 3% to $49.8 billion, but with a much healthier rise in net income, more than 40%, to $11.2 billion.

Bristol Myers has an attractively low forward price-to-earnings and sales ratios, but of course that reflects some continued rough sailing ahead. AbbVie is a little pricier, but not outrageously so, considering the exceptional year it is in the midst of having. Long-term investors would do well to build a position in AbbVie, even if paying a little bit of a premium today.

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