ABBV
AbbVie Inc.
Healthcare · Drug Manufacturers - General · United States · Stock
Score Breakdown
Scored for Dividend Income profile
Sub-scores are 0–20 each; Model Score is weighted by your selected investment goal. How it works →
Why Ranked Here
- The composite score reflects a company with genuine revenue growth and a strong operating margin, offset by declining net income, erratic quarterly earnings, and an unsustainably high dividend payout ratio [growth.revenue.yoy, profitability.operating_margin_pct, growth.net_income.yoy, dividend.payout_ratio, momentum.net_income_quarterly].
- The financial health factor scored well due to a large asset base and positive interest coverage, but the deeply negative debt-to-equity ratio introduces structural complexity that tempers overall confidence [financial_health.total_assets, financial_health.interest_coverage, financial_health.debt_to_equity].
- The absence of any macro theme assignment means no thematic tailwind was applied to the score, keeping the total score at a mid-range level [theme.none].
Why Not Higher
- Quarterly earnings momentum was severely penalized by a net loss quarter and wide swings in both net income and operating income, dragging down the overall composite score [momentum.net_income_quarterly, momentum.operating_income_quarterly].
- The net margin of 6.9% is far below the 24.6% operating margin, and the dividend payout ratio of 275.8% signals that profitability and dividend sustainability are both meaningful concerns [profitability.net_margin_pct, profitability.operating_margin_pct, dividend.payout_ratio].
Data Confidence
10 / 10
Very High — full data coverage
Why This Score
Grounded in figures from this company's SEC EDGAR filings — not a restatement of the score itself.
Revenue grew from FY2024's $56,334,000,000 to FY2025's $61,160,000,000, a gain of 8.6%, but net income declined 1.2% from FY2024's $4,278,000,000 to FY2025's $4,226,000,000, and diluted EPS fell 1.3% from FY2024's $2.39 to FY2025's $2.36.
The model rewarded meaningful top-line expansion but penalized the divergence between revenue growth and bottom-line contraction, resulting in a below-midpoint score that reflects mixed growth quality.
In FY2025, AbbVie posted an operating margin of 24.6%, a net margin of 6.9%, and a return on assets of 3.2%.
The model recognized a solid operating margin but was tempered by a net margin that falls well below the operating margin, suggesting significant below-the-line costs, and a modest return on assets, together producing a near-midpoint score.
In FY2025, AbbVie reported a debt-to-equity ratio of -19.73, an interest coverage ratio of 5.2, and total assets of $133,960,000,000.
The deeply negative debt-to-equity ratio indicates that shareholders' equity is negative, a technical condition the model appears to have interpreted favorably in context alongside a positive interest coverage ratio and a large asset base, yielding a high score.
Net income over the last four quarters was highly volatile: $938,000,000 in 2025Q2, falling to $186,000,000 in 2025Q3, turning negative at -$594,000,000 in 2025Q4, then recovering to $695,000,000 in 2026Q1. Operating income similarly swung from $4,894,000,000 in 2025Q2 down to $1,904,000,000 in 2025Q3, back up to $4,544,000,000 in 2025Q4, then to $3,990,000,000 in 2026Q1.
The model penalized the sharp quarter-to-quarter swings in both net income and operating income, including a net loss quarter, as this erratic pattern signals weak and inconsistent earnings momentum.
AbbVie has grown its dividends per share each year from FY2022's $5.71 to FY2023's $5.99, FY2024's $6.29, and FY2025's $6.65, though the FY2025 dividend payout ratio stands at 275.8% of net income.
The model rewarded the consistent multi-year dividend growth trajectory but was constrained by the extremely elevated payout ratio, which signals that dividends are being funded well beyond current net earnings.
AbbVie is not currently assigned to any of the 24 tracked macro themes.
The absence of a macro theme assignment means the model did not apply any thematic tailwind to the score; this reflects the current classification status and is not an indicator of the company's underlying quality.
Research Summary
AI-generated analysis reflects data and conditions as of the report date shown above. Verify any specific figures through primary sources before acting on this analysis.
AbbVie delivered solid top-line growth of 8.6% in FY2025, reaching $61.16 billion in revenue, but bottom-line results were mixed, with net income slipping 1.2% to $4.23 billion and diluted EPS declining to $2.36 [growth.revenue.yoy, growth.net_income.yoy, growth.eps_diluted.yoy]. Profitability metrics show a meaningful gap between the 24.6% operating margin and the 6.9% net margin, pointing to significant below-the-line costs that weigh on overall earnings quality [profitability.operating_margin_pct, profitability.net_margin_pct]. The company maintains a consistent dividend growth track record, though the FY2025 payout ratio of 275.8% of net income raises sustainability questions [dividend.dps_trend, dividend.payout_ratio]. Quarterly earnings momentum has been highly erratic, including a net loss quarter, adding further uncertainty to the near-term outlook [momentum.net_income_quarterly].
Plain English
AbbVie is bringing in more revenue each year, but its actual profits are shrinking and its dividend payments are far larger than what it earns, which makes the overall picture complicated and worth watching carefully before drawing conclusions [growth.revenue.yoy, growth.net_income.yoy, dividend.payout_ratio].
Bull Case vs. Bear Case
Bull Case
- Revenue grew a meaningful 8.6% year-over-year to $61.16 billion in FY2025, demonstrating strong top-line momentum [growth.revenue.yoy].
- AbbVie has grown its dividend per share every year from $5.71 in FY2022 to $6.65 in FY2025, reflecting a consistent commitment to returning capital to shareholders [dividend.dps_trend].
- The company's operating margin of 24.6% in FY2025 indicates a solid underlying business capable of generating substantial operating cash flow [profitability.operating_margin_pct].
Bear Case
- Despite strong revenue growth, net income fell 1.2% and diluted EPS declined 1.3% in FY2025, signaling that top-line gains are not translating to bottom-line improvement [growth.net_income.yoy, growth.eps_diluted.yoy].
- The FY2025 dividend payout ratio of 275.8% of net income means dividends are being funded well beyond current earnings, raising serious questions about long-term dividend sustainability [dividend.payout_ratio].
- Quarterly net income was highly volatile over the last four quarters, including a net loss of $594 million in 2025Q4, reflecting deeply inconsistent earnings momentum [momentum.net_income_quarterly].
What Could Change the Picture
Bullish Triggers
- A sustained narrowing of the gap between operating margin and net margin — indicating reduced below-the-line costs — would signal improving earnings quality and could strengthen the investment case [profitability.operating_margin_pct, profitability.net_margin_pct].
- Stabilization of quarterly net income and operating income without the sharp swings seen recently would suggest the business is returning to a more predictable earnings trajectory [momentum.net_income_quarterly, momentum.operating_income_quarterly].
Bearish Triggers
- If the payout ratio remains far above 100% of net income for multiple consecutive years, the dividend growth streak could become financially untenable [dividend.payout_ratio, dividend.dps_trend].
- Continued divergence between revenue growth and net income contraction would indicate structural cost pressures that erode the value of top-line expansion [growth.revenue.yoy, growth.net_income.yoy].
Risk Profile
Medium RiskAbbVie's deeply negative debt-to-equity ratio of -19.73 reflects negative shareholders' equity, a structurally unusual condition, while an interest coverage ratio of 5.2 provides a moderate but not ample buffer against debt obligations [financial_health.debt_to_equity, financial_health.interest_coverage]. Compounding this, quarterly net income swung from a gain of $938 million to a loss of $594 million within three quarters, highlighting meaningful earnings volatility that adds to the risk profile [momentum.net_income_quarterly].
This report is for educational and research purposes only. It does not constitute financial, investment, legal, or tax advice — always conduct your own due diligence before making investment decisions.