AbbVie and Merck Defy Stock Market Turmoil with Steady Gains and Dividends
Pharmaceutical giants AbbVie and Merck have once again proven their resilience in uncertain stock markets today. Both companies continue to deliver strong dividends and steady growth, even as analysts warn of potential downturns in the dow jones in 2026. Their performance in past corrections has made them standout choices for investors seeking stability in the stock market.
Over the last five years, both firms have outperformed the broader S&P 500, with AbbVie climbing around 120% and Merck gaining roughly 95%. This success comes despite challenges like patent expirations and shifting stock market conditions, reinforcing their reputation as defensive stocks.
AbbVie and Merck have long been favoured for their reliable dividends. AbbVie currently offers a yield of 3.10%, while Merck follows closely at 2.99%. AbbVie has raised its payout every year since splitting from Abbott Laboratories in 2013. Merck's streak is even longer, with 15 consecutive years of dividend increases.
Both companies have shown particular strength during stock market downturns. In the 2022 bear market, AbbVie's stock rose 24%, and Merck surged 49%, while the S&P 500 fell 18%. Their defensive nature—driven by steady demand for healthcare products—has helped them weather stock market volatility better than many sectors.
Looking ahead, AbbVie projects adjusted earnings per share of $14.37 to $14.57 for 2026, a 43% to 45% jump from 2025. Merck expects global sales between $65.5 billion and $67 billion in the same year, representing growth of 1% to 3%. These forecasts come as 74% of institutional money managers anticipate a stock market correction in 2026, citing risks like geopolitical tensions and economic instability.
Over the past decade, stock markets have faced eight corrections or bear phases. Yet, AbbVie and Merck have consistently outperformed in turbulent times. AbbVie's growth has been fuelled by strong sales of Humira and Rinvoq, along with the success of Skyrizi, despite patent challenges. Merck's performance has relied on Keytruda's dominance in oncology and steady demand for Gardasil.
While the S&P 500 has gained about 85% over the last five years, AbbVie's 120% rise and Merck's 95% increase highlight their ability to thrive in the stock market. Even in bullish phases, where pharmaceutical stocks sometimes lag due to interest rate sensitivity, their defensive qualities shine during stock market downturns. AbbVie has faced pressure from biosimilar competition, but Merck's momentum—boosted by its COVID-era performance—has kept it strong.
Currently, the Nasdaq Composite remains flat year-to-date, while the S&P 500 has edged up by roughly 1.7%. Against this backdrop, AbbVie and Merck continue to attract investors looking for stability in an unpredictable stock market.
AbbVie and Merck's track records suggest they will remain key players in 2026, regardless of broader stock market conditions. Their strong dividends, consistent earnings growth, and ability to outperform during stock market downturns make them appealing to cautious investors. With many analysts predicting a stock market correction, their defensive positioning could once again prove valuable in the coming year.
