Here Are 2 Affordable Healthcare Stocks to Buy Heading Into 2026

AbbVie and Merck both look like reasonable, dividend-paying large-cap healthcare opportunities but with contrasting near-term dynamics: AbbVie recovered after Humira’s 2023 loss of exclusivity, is now less Humira-dependent with Skyrizi and Rinvoq driving growth, pursuing oncology candidates (ABBV-969, ABBV-514) and a weight‑loss license, enjoys no major patent cliffs through 2030 and trades at a modest 15.9x forward P/E while retaining Dividend King status. Merck is wrestling with weaker Gardasil demand in China and potential Keytruda biosimilar competition over the next five years, yet is countering with new launches and M&A—Capvaxive posted $244m in Q3, it acquired Cidara for an antiviral franchise, and assets like Winrevair and a subcutaneous Keytruda formulation offer multi‑billion dollar upside—while trading at ~10.5x forward P/E and showing strong dividend growth. For investors, AbbVie offers a more stable, de‑risked income play with pipeline optionality, whereas Merck presents deeper near‑term execution risk but potentially larger long‑term upside if new vaccines and oncology assets scale as projected.

Analysis

AbbVie materially rebalanced after Humira lost exclusivity in 2023 and has returned to top-line growth driven by successors Skyrizi and Rinvoq; management reports no major patent cliffs through 2030, it has pursued oncology pipeline assets (ABBV-969, ABBV-514) and a weight‑loss license (GUB014295), and the stock trades at a modest 15.9x forward P/E versus the healthcare average of 18.3 while retaining Dividend King status. These facts position AbbVie as a lower‑risk, income-oriented large cap with meaningful optionality from mid‑stage oncology bets, though Skyrizi/Rinvoq still shoulder substantial revenue responsibility. Merck faces clear near‑term headwinds: Gardasil demand weakness in China and potential Keytruda biosimilar competition over the next five years, yet management is offsetting that via new vaccine commercialization (Capvaxive which generated $244m in Q3), the Cidara acquisition for antivirals, an approved Winrevair program targeting ~$6bn by 2030, and a potential subcutaneous Keytruda formulation projected to reach ~$7.6bn by 2030. Market sentiment is moderately positive overall (score 0.45) with stronger sentiment for ABBV (0.7) than MRK (0.3); the market impact score is modest (0.3), implying progress in pipelines and execution will drive material re-rating or downside.

Key Decisions for Investors

• Consider a core, income‑oriented allocation to AbbVie given its 15.9x forward P/E, Dividend King status and no major patent cliffs through 2030, while actively monitoring Skyrizi/Rinvoq revenue trends and clinical readouts for ABBV-969 and ABBV-514
• Treat Merck as a selective buy at ~10.5x forward P/E with meaningful upside if Capvaxive, Winrevair and a subcutaneous Keytruda scale; size positions conservatively or hedge because of China‑led Gardasil weakness and the multi‑year risk of Keytruda biosimilars
• Use position sizing and set specific catalysts to watch (quarterly sales for Skyrizi/Rinvoq and Keytruda, Capvaxive quarter‑over‑quarter growth from the $244m Q3 baseline, Cidara integration, and any biosimilar or patent developments) and trim or hedge on adverse execution or accelerated biosimilar uptake