ABT vs PEP: Which Is the Better Buy in 2026?
Last updated October 2026
Short answer
ABT (Abbott Laboratories) and PEP (PepsiCo) share investment themes but are different businesses. The right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme.
ABT vs PEP: the tie-breaker metrics
Same yardstick, side by side (as of October 2026). Valuation lined up like this is most meaningful for two names in the same corner of the market, which these are. Figures are approximate; verify before investing.
| Metric | ABT | PEP | What it tells you |
|---|---|---|---|
| Market cap | $182.70B | $179.19B | Size. The larger name is the incumbent; the smaller has more room to grow and more to prove. |
| Forward P/E | 17.29 | 15.22 | Valuation on next year's expected earnings, the same yardstick for both. Lower is cheaper for that growth; higher means the market is paying up. |
| Trailing P/E | 33.84 | 16.54 | Valuation on the last 12 months. A big drop from trailing to forward means the market expects earnings to jump, so more growth is already in the price. |
| Beta | 0.58 | 0.36 | Volatility vs the market. Above 1 swings harder than the index; below 1 is steadier. Higher beta means bigger drawdowns to hold through. |
| Price vs 52-week range | 46% of range | 17% of range | Where today's price sits between the 52-week low and high. Near the high is momentum with less margin of safety; near the low is out of favor or a discount, depending on why. |
| Price / book | 3.55 | 8.05 | How much you pay over book value. Very high can signal an asset-light, high-return business or a rich price. |
Before you buy: how ABT and PEP affect your concentration
The metrics above tell you which is the marginally better business. The bigger risk for most people is not picking the slightly worse stock, it is over-concentrating. ABT and PEP share themes, so owning both, or adding either to what you already hold, can quietly push a large share of your portfolio into one bet.
This is the part a generic comparison page cannot answer, because it depends on what you own. Connect your brokerage and Walnut shows your real, combined ABT and PEP exposure, flags overlap with your existing positions, and tells you if adding one would tip you past a concentration you are comfortable with, read-only by default, with your login staying at your broker. Walnut is not an investment adviser.
What does Abbott Laboratories (ABT) do?
Abbott Laboratories is a global healthcare company headquartered in North Chicago, Illinois, that discovers, develops, manufactures, and sells health care products in more than 160 countries through four segments: Medical Devices, Diagnostic Products, Nutritional Products, and Established Pharmaceutical Products. Medical Devices, the largest segment at roughly $21.4 billion in 2025 revenue, includes the FreeStyle Libre family of continuous glucose monitors, structural heart products (Navitor, TriClip), electrophysiology systems (AVEIR leadless pacemaker, Volt pulsed field ablation, TactiFlex Duo), vascular devices, and heart-failure technologies (CardioMEMS). Diagnostics contributed roughly $8.9 billion in 2025 before the Exact Sciences deal, Nutrition roughly $8.5 billion (anchored by Similac infant formula and Ensure adult nutrition), and Established Pharmaceuticals roughly $5.5 billion in branded generics sold primarily in emerging markets.
What does PepsiCo (PEP) do?
PepsiCo is one of the world's largest food and beverage companies, generating about $98 billion of revenue over the trailing twelve months across a portfolio that spans Pepsi, Gatorade, Mountain Dew, Lay's, Doritos, Cheetos, Tostitos and Quaker. Its Frito-Lay snack arm controls more than 60% of the U.S. salty-snacks market and carries operating margins north of 40%, making convenient foods the company's profit engine, while its beverage unit holds the No. 2 spot in U.S. carbonated soft drinks (behind Coca-Cola) and leads sports drinks with Gatorade. Roughly half of revenue comes from foods and the business is spread across North America and fast-growing international markets.
ABT vs PEP: how do they differ?
Both fit overlapping themes, but they are not interchangeable. The useful comparison is which set of drivers and risks you want exposure to.
- ABT drivers: FreeStyle Libre: A Platform, Not Just a Product; Cardiovascular and Electrophysiology Momentum.
- PEP drivers: Frito-Lay snack moat; Volume recovery and value pricing.
Which fits which kind of investor
A faster-growing, richer-valued name usually swings harder, so it suits a longer horizon and a higher tolerance for volatility; a steadier, more cash-generative business suits a more conservative or income-minded investor. The honest test is which set of risks you could hold through a drawdown: The most acute near-term risk is infant formula litigation: juries have delivered verdicts including a $53 million compensatory award in late March 2026 and a separately upheld $495 million verdict, with hundreds of additional NEC-related cases pending, and a securities class action filed in 2026 adds a parallel legal exposure track targeting alleged investor misstatements. For PEP, pepsiCo faces several structural headwinds.
ABT or PEP: which should you pick?
ABT vs PEP: the full fundamentals
ABT. ABT's trailing GAAP P/E of about 34x is inflated by acquisition amortization and one-time costs from the Exact Sciences deal; on forward earnings the stock trades near 17x, well below its own 5-year and 10-year historical averages, after a roughly 16% decline in 2026. Revenue growth has remained positive, and the raised adjusted EPS guidance of $5.45-$5.60 implies a forward adjusted P/E of about 19x at the October 16 price of $104.44, below the average analyst target of about $121. Q3 2026 results are due October 21, with company guidance of $1.38-$1.46 adjusted EPS and consensus near $1.41 on about $13.0 billion of sales.
PEP. At about $131 (October 16, 2026) PepsiCo trades near 15x forward earnings, below the S&P 500 average and lower than in July, while yielding about 4.6%, among the highest yields the stock has offered in years. Analysts expect only about 3% EPS growth in both 2026 and 2027 (consensus near $8.40 and $8.64), and the 22 analysts tracked by Yahoo Finance rate it a hold on average with a mean target near $142. The valuation reflects a market pricing in slow growth in exchange for defensive stability and reliable income.
Headline figures (approximate, October 2026): ABT shows revenue (ttm) ~$46.6 billion (Q2 2026 sales $12.59 billion, +13% reported, +4.8% comparable), revenue (fy 2025) ~$44.3 billion (+5.7% YoY), net income (ttm) ~$5.4 billion (GAAP EPS ~$3.10), net profit margin (ttm) ~11.7%; PEP shows revenue (ttm) ~$98.2B, q3 2026 revenue ~$25.3B (+~5.6% YoY), q3 2026 eps ~$2.34 vs ~$2.30 consensus, net income (ttm) ~$10.9B (~11% margin).
The bottom line: ABT vs PEP
ABT and PEP are related but distinct: same themes, different businesses and risks. Neither wins in the abstract; the right pick is whichever thesis you actually believe, sized so you are not over-concentrated in one theme. Walnut can show your combined ABT and PEP exposure against your real portfolio. It is not an investment adviser.
Wondering how ABT or PEP fits the portfolio you already own? Walnut is an AI investing app that connects your brokerage read-only and answers questions like that about your actual holdings: overlap, concentration, and how each position tracks the S&P 500. Compare the best AI portfolio analyzers or see the best AI investing apps in 2026.
Investing in Abbott Laboratories with AI
Connect the broker you already use and ask Walnut's AI how ABT fits what you actually hold: whether you own it already through a fund, what it would do to your concentration, and how it has tracked the S&P 500. Read-only by default, and you approve anything before it reaches your broker.
FAQ
What is the difference between ABT and PEP?
+
Abbott Laboratories is a global healthcare company headquartered in North Chicago, Illinois, that discovers, develops, manufactures, and sells health care products in more than 160 countries through four segments: Medical Devices, Diagnostic Products, Nutritional Products, and Established Pharmaceutical Products. PepsiCo is one of the world's largest food and beverage companies, generating about $98 billion of revenue over the trailing twelve months across a portfolio that spans Pepsi, Gatorade, Mountain Dew, Lay's, Doritos, Cheetos, Tostitos and Quaker. They show up together because they share investment themes, but they are different businesses, so the better fit depends on which thesis you are expressing.
Is ABT or PEP the better stock?
+
Neither is universally better; they suit different views and risk levels. Walnut is informational, not investment advice. Compare what each does, the tie-breaker metrics above, and the risks, then decide which fits your thesis and what you already own.
Which is cheaper, ABT or PEP?
+
On forward P/E (as of October 2026), ABT trades at 17.29x and PEP at 15.22x, so PEP is the cheaper of the two on next year's expected earnings. A lower multiple is not automatically the better buy: a richer valuation can be justified by faster growth, and a lower one can reflect real risk. Weigh the multiple against how fast each business is compounding.
Should you own both ABT and PEP?
+
Because they share themes, owning both concentrates you in that theme. That can be intentional (a focused bet) or accidental (less diversification than it looks). Walnut can show your combined exposure across both, and whether adding either over-concentrates you, before you buy.
What are the risks of ABT vs PEP?
+
ABT: The most acute near-term risk is infant formula litigation: juries have delivered verdicts including a $53 million compensatory award in late March 2026 and a separately upheld $495 million verdict, with hundreds of additional NEC-related cases pending, and a securities class action filed in 2026 adds a parallel legal exposure track targeting alleged investor misstatements. Abbott has started to narrow this exposure, reaching agreements in August 2026 to resolve a portion of the preterm-formula litigation and an agreement with the Department of Justice in September 2026 on claims tied to the 2022 recall, but the remaining liability is still open-ended. Integration of the approximately $21 billion Exact Sciences acquisition introduces execution risk, amortization and elevated SGA costs: GAAP EPS was only $0.53 in Q2 2026 against adjusted EPS of $1.31, and the trailing GAAP P/E is about 34x even though the forward multiple is about 17x. Organic growth also slowed to 4.8% in Q2 2026 on a comparable basis, below the full-year 6.5-7.5% guide. Foreign exchange swings move reported international revenue by several percentage points, and any meaningful dollar strengthening would pressure reported results disproportionately given Abbott's broad non-US exposure. Competitive disruption in continuous glucose monitoring from DexCom and emerging players, along with pricing pressure from government payers and the Inflation Reduction Act, represent structural long-term headwinds. PEP: PepsiCo faces several structural headwinds. Organic revenue growth has slowed, rising only about 2.6% in Q1 2026, as inflation-weary consumers trade down to private-label snacks and drinks, and October 2026 coverage reported a recent cut to full-year guidance tied to execution missteps and inflation. Foodservice accounts are also slipping: Coca-Cola won Marriott's beverage business in April 2026 and, per October 16 reports, KFC's U.S. restaurants from around January 2027, with Evercore ISI estimating the direct lost revenue to PepsiCo at about $50 million. Widespread adoption of GLP-1 weight-loss medications and broader health awareness could pressure long-term demand for sugary sodas and salty snacks, the core of PepsiCo's portfolio. Input-cost inflation, currency swings across its large international footprint, about $52 billion of debt, and intense competition from Coca-Cola, Monster, Mondelez and store brands all weigh on margins. As a mature mega-cap, growth is modest, so the stock is sensitive to any stumble in volumes or to rising interest rates that make its dividend yield less competitive.
Related comparisons
Browse all stock comparisons.
Walnut is informational, not investment advice. This page is descriptive and not a recommendation to buy or sell ABT or PEP; figures are approximate and dated (as of October 2026). Verify current data before investing.