One comparison tells a lot about the current situations for AbbVie Inc. (NYSE:ABBV) and Eli Lilly (NYSE:LLY). AbbVie stock has fallen more than 20% over the last month -- and it's still outperforming Lilly over the past 12 months and so far in 2018.

But that comparison doesn't tell us much about the future prospects for either big pharma company. Which stock is the better choice for investors looking at the long run? Here's how AbbVie and Lilly stack up against each other in three key categories.

Three scientists in lab

Image source: Getty Images.

Growth prospects

AbbVie's growth engine of the past, Humira, still has some juice left. The autoimmune disease drug generated $18.4 billion in sales last year. AbbVie thinks Humira's sales will grow to close to $21 billion by 2020. Beginning in 2023, though, Humira will face competition from biosimilars in the U.S. That means AbbVie will need to offset the inevitable sales decline for its top-selling drug.

Imbruvica will be one important key for the drugmaker to continue growing. Hepatitis C drug Mavyret, approved last year, will be another. But it's AbbVie's pipeline that is most critical for future growth.

The company had hoped to win FDA approval for elagolix in treating endometriosis by the second quarter of 2018. However, the FDA recently told AbbVie that it would need an extra three months for reviewing the application for the drug. AbbVie had an even more serious setback in March with disappointing results for rovalpituzumab tesirine (Rova-T) as a third-line treatment for relapsed/refractory small cell lung cancer (SCLC).

Still, AbbVie's pipeline includes several other promising candidates, including cancer drugs Venclexta and veliparib as well as immunology drugs upadacitinib and risankizumab. Overall, AbbVie should be able to generate solid double-digit percent earnings growth for years to come.

The growth outlook for Eli Lilly is more complicated. Lilly isn't as dependent on one drug as AbbVie is. Several drugs in the big pharma company's current lineup should contribute to growth. Trulicity stands at the top of the list. The diabetes drug raked in sales topping $2 billion in 2017, up 119% year over year.

Lilly also saw strong sales growth last year for a couple of other diabetes drugs, Forteo and Trajenta. And the company's psoriasis and psoriatic arthritis drug Taltz is picking up nice momentum.

The problem for Lilly is that its top-selling product, Humalog, has lost patent exclusivity and faces the prospects of generic competition. Sales are already falling for the company's No. 2 and No. 3 best-selling drugs, Cialis and Alimta.

What about Lilly's pipeline? The company hopes to obtain FDA approval this year for migraine drug galcanezumab. Lilly also has several late-stage candidates that could be big winners, notably including pain drug tanezumab, which is being developed with Pfizer, and migraine drug lasmiditan. The drugmaker also has phase 3 studies in progress targeting additional indications for several already-approved drugs such as Cyramza and Jardiance. 

Even with its challenges for several current drugs in its lineup, Lilly should be able to grow earnings over the next few years -- perhaps even by a low double-digit percentage, if there are no big pipeline stumbles. However, AbbVie appears to still have better growth prospects than Lilly does.

Valuation

We can't compare the two companies based on trailing-12-month price-to-earnings ratios. Lilly posted a net loss for 2017 due to a big one-time tax hit. However, we can look at forward earnings multiples. 

AbbVie stock currently trades at 11 times expected earnings. Lilly appears to be more expensive, with shares trading at nearly 15 times expected earnings. As you might expect, AbbVie's valuation also looks more attractive factoring in growth prospects, with a PEG ratio of 0.74 compared to 1.39 for Lilly. 

Dividend

AbbVie claims a nice dividend yield of 3.91%. The company has increased its dividend by 140% since being spun off from Abbott Labs in 2013. AbbVie uses less than 44% of its free cash flow to fund the dividend program, indicating plenty of flexibility to hike the dividend in the future.

Lilly's dividend yield currently stands at 2.84%. The drugmaker held its dividend payment steady between 2010 and 2014, but it has hiked the dividend each year since 2015. Lilly uses 63% of its free cash flow to pay dividends. Its dividend appears to be pretty safe, but isn't as attractive as AbbVie's.

Better buy

If you've been keeping score, you'll have noticed that AbbVie won in all three categories. With better growth prospects than Lilly, a more attractive valuation, and a stronger dividend, AbbVie certainly appears to be the better stock to buy, in my view.

AbbVie faces risks, though. The problems for Rova-T, a drug for which AbbVie has had high hopes, underscores the dangers in buying the stock. However, I continue to like the long-term prospects for AbbVie and expect it will generate impressive total returns for investors who buy and hold.

Keith Speights owns shares of AbbVie and Pfizer. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.