AbbVie Inc. (ABBV) vs Keurig Dr Pepper Inc. (KDP): Which Is the Better Buy in 2026?
As of 2026-11-01, ABBV is overvalued at $295, with a DCF intrinsic value of $172 and a margin of safety of -71%. KDP is overvalued at $36, with an intrinsic value of $19 and a margin of safety of -87%. Of the two, ABBV has the wider margin of safety.
Rewards
- ★AbbVie Inc. has maintained ROIC above 10% for 4 consecutive years, suggesting solid business economics.
- ★Gross margin of 73.7% indicates strong pricing power — typical of businesses with significant intellectual property or brand strength.
- ★AbbVie Inc. scores 82/100 on the Economic Moat Score (Wide Moat), with reinvestment efficiency as the strongest competitive dimension.
- ★Each dollar of retained earnings has created $2.96 of earning power — management is an exceptional capital allocator.
- ★FCF yield of 9.4% is historically attractive — the business generates significant cash relative to its price.
Risks
- ⚠Buybacks have been poorly timed — 3 out of 4 years involved repurchases at relatively expensive valuations.
- ⚠Insiders have sold $8.2M worth of stock in the past 3 months — significant insider liquidation.
- ⚠Free cash flow has declined at a 9.8% CAGR over the past 4 years — a concerning trend.
- ⚠Trailing P/E of 36.2x is 38% above the historical average of 26.3x — the stock trades at a premium to its own history.
- ⚠Net debt/EBITDA of 6.7x indicates heavy leverage — it would take over 4 years of EBITDA to pay off net debt.
- ⚠Altman Z-Score of 1.36 places the company in the distress zone — financial patterns resemble those of companies that experienced bankruptcy.
Key Valuation Metrics
Learn more →Historical Fundamentals
Learn more →Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
Price ÷ Earnings Per Share — how many years of current earnings you're paying for at today's price. Lower P/E may indicate undervaluation. The dashed forward point is the forward P/E — today's price ÷ analyst consensus EPS.
$1 Retained Earnings Test
Learn more →> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Buffett's "$1 Test": For every $1 of earnings retained, has management created at least $1 of market value?
> $1 created per $1 retained = Value Creator · < $1 created = Value Destroyer
Discounted Cash Flow (DCF) Analysis
Learn more →Reverse DCF — Market-Implied Growth
Learn more →Requires positive FCF to compute implied growth rate.
What growth rate is the market pricing in at $36?
The market implies +15.2% Owner Earnings growth, above historical trends.
Standard FCF implies a demanding +5.9%, reflecting heavy growth investment.
Economic Moat Score
Learn more →Wide moat with strength across all dimensions. Reinvestment Efficiency is the standout factor.
Narrow moat with margin stability as the key competitive advantage. Improving roic consistency would strengthen the moat.
Forensic Accounting
Learn more →M-Score Trend
M-Score Trend
Beneish's 8-variable model estimates the probability of earnings manipulation. An M-Score above -1.78 signals elevated risk — companies in this range have historically been 3-5× more likely to be manipulating earnings. Scores between -2.22 and -1.78 fall in a grey zone warranting further investigation.
Ownership Breakdown
Learn more →High insider ownership aligns management incentives with shareholders. Institutional concentration can indicate smart-money conviction but also crowding risk.
Insider Buying Activity
Learn more →Open market purchases · includes direct & indirect ownership · excludes option exercises.
Insider Selling Activity
Learn more →Direct ownership only · excludes indirect, option exercises, planned (10b5-1) sales & derivatives.
🎭 Mr. Market's Mood
Learn more →"Market is optimistic — be cautious and ensure you have a margin of safety"
"Market is optimistic — be cautious and ensure you have a margin of safety"
Composite sentiment score based on market signals. Inspired by Buffett’s "Mr. Market" allegory — fear = potential opportunity, greed = potential risk. Must be used alongside fundamental analysis, not in isolation.
⚖️ Buffett Signal
Learn more →The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
The Buffett Signal cross-references market sentiment with DCF valuation. Configure the DCF Analysis above to generate a signal.
Frequently Asked Questions: ABBV vs KDP
Is AbbVie Inc. or Keurig Dr Pepper Inc. more undervalued in 2026?▼
Based on our discounted cash flow model, ABBV trades at a -71.5% margin of safety (intrinsic value $172 vs. price $295), compared to KDP's -87.0% margin of safety (intrinsic $19 vs. $36).
Which stock has a wider economic moat, AbbVie Inc. or Keurig Dr Pepper Inc.?▼
ABBV scores 82/100 (Wide moat), while KDP scores 69/100 (Narrow moat). The moat score measures competitive advantage durability across ROIC consistency, margin stability, revenue predictability, and reinvestment efficiency.
Is Keurig Dr Pepper Inc. in financial distress?▼
KDP's Altman Z-Score of 1.4 places it in the Distress zone, signaling elevated bankruptcy risk. ABBV scores 2.4 (Grey zone). The Altman Z-Score is a five-factor model that predicts insolvency within two years; scores below 1.81 indicate significant distress.
Which stock has higher return on invested capital, AbbVie Inc. or Keurig Dr Pepper Inc.?▼
ABBV earns 29.1% ROIC versus KDP's 3.0%. A higher ROIC means the company generates more profit per dollar of capital employed, a hallmark of durable competitive advantage in Buffett-style analysis.
Which dividend is safer, AbbVie Inc.'s or Keurig Dr Pepper Inc.'s?▼
KDP's dividend earns a safety score of 54/100 (Borderline), compared to ABBV's 39/100 (Unsafe). KDP has raised its dividend for 3 consecutive years.