Introduction
AbbVie and Amgen are two major players in the biotech sector, both known for rewarding shareholders with consistent dividend payouts. But when it comes to choosing the better dividend stock in 2025, which one offers stronger yield, growth, and long-term sustainability? In this SEO-optimized dividend analysis, we compare AbbVie and Amgen across three key metrics: valuation, dividend yield and growth, and payout sustainability.
1. Valuation: Are AbbVie and Amgen Fairly Priced?
Valuation helps investors understand whether a stock is overvalued or undervalued. We use the Price-to-Earnings (P/E) ratio to make this comparison.
| Year | ABBV P/E | AMGN P/E |
|---|---|---|
| 2020 | 18.7 | 16.4 |
| 2021 | 19.2 | 17.1 |
| 2022 | 18.3 | 16.7 |
| 2023 | 17.9 | 16.5 |
| 2024 | 17.8 | 16.2 |
| 2025 | 17.6 | 15.9 |
Valuation Analysis:
Amgen currently trades at a lower P/E ratio than AbbVie, indicating a more attractive valuation for income investors seeking biotech exposure.
2. Dividend Yield and Growth: Which Pays More Over Time?
A strong dividend yield is a key metric for income investors, but consistent dividend growth is just as important for long-term compounding.
| Year | ABBV Yield | AMGN Yield |
|---|---|---|
| 2020 | 4.9% | 3.0% |
| 2021 | 4.7% | 2.9% |
| 2022 | 4.4% | 3.1% |
| 2023 | 4.3% | 3.3% |
| 2024 | 4.1% | 3.2% |
| 2025 | 4.0% | 3.2% |
| 6-Year Avg | 4.4% | 3.1% |
5-Year Dividend Growth CAGR:
AbbVie: 8.3%
Amgen: 10.2%
Dividend Analysis:
AbbVie has historically offered a higher dividend yield, while Amgen leads in dividend growth. This makes Amgen more attractive for growth-focused dividend investors, while AbbVie suits those seeking current income.
3. Payout Ratio: Is the Dividend Sustainable?
The payout ratio shows what percentage of earnings is paid out as dividends. A lower payout ratio generally indicates more room for dividend growth and less risk of cuts.
| Year | ABBV Payout | AMGN Payout |
|---|---|---|
| 2020 | 63% | 45% |
| 2021 | 62% | 46% |
| 2022 | 61% | 47% |
| 2023 | 60% | 47% |
| 2024 | 58% | 46% |
| 2025 | 57% | 45% |
Sustainability Analysis:
Both companies maintain healthy payout ratios below 80%, but Amgen offers more margin for safety with its consistently lower ratio. This suggests greater long-term flexibility for dividend increases.
Conclusion: Which Dividend Stock Is the Better Buy?
Both AbbVie (ABBV) and Amgen (AMGN) are top-tier dividend stocks in the biopharmaceutical sector. Each offers solid income potential, large market capitalizations, and stable dividend histories. However, based on our analysis:
- Valuation: Amgen is slightly more attractively valued based on its lower P/E ratio.
- Dividend Yield: AbbVie provides a significantly higher current yield.
- Dividend Growth: AbbVie has outpaced Amgen in recent dividend growth, signaling more aggressive income expansion.
- Sustainability: Amgen maintains a lower payout ratio, indicating more conservative, sustainable dividend practices.
Final Verdict:
AbbVie (ABBV) edges out Amgen as the better dividend stock in 2025 for income-focused investors. Its combination of a higher yield and stronger dividend growth outweighs its slightly higher payout ratio. While Amgen is more conservative and offers valuation appeal, AbbVie’s total income potential makes it the more compelling choice for dividend investors this year.
Disclaimer: This analysis is for informational purposes only and does not constitute investment advice. Always do your own research or consult a financial advisor before investing.
Stocks and Dividends 
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