Gilead Sciences (NASDAQ:GILD) has been struggling recently as the company's hepatitis C drug business is no longer performing as well as it used to. Last year, the pharma stock gained a meager 3.88% in part due to its declining hepatitis C Virus (HCV) drug sales.

By contrast, Amgen's (NASDAQ:AMGN) stock gained a healthy 23.84% last year, despite some of the company's products -- such as Neulasta, which treats a lack of white blood cells caused by chemotherapy -- encountering stiff competition from biosimilars. Will Amgen continue to outperform Gilead Sciences moving forward? 

Product lineup

Though Gilead Sciences' HCV revenue is declining, this segment still includes products such as Harvoni and Epclusa, which generate decent sales. However, Gilead Sciences makes the bulk of its revenue from its HIV lineup. In particular, the company's HIV prevention medicine Biktarvy has been performing well. Gilead Sciences HIV products also include Genvoya, Descovy, and Truvada. But the U.S. government filed a lawsuit against Gilead Sciences last year alleging that Descovy and Truvada infringe on patents held by the U.S. Department of Health and Human Services (DHHS). Not much has come of this lawsuit yet. 

Doctor wearing a lab coat giving a thumbs up

Image source: Getty Images.

Amgen's top-selling product is Enbrel, which treats several conditions, including rheumatoid arthritis (RA). The company also boasts several other drugs with growing sales, including Prolia, a medicine used to treat osteoporosis in postmenopausal women. Lastly, Amgen can count on sales of Xgeva, which treats giant cell bone tumors, and its cancer medicine Kyprolis. 

Financial results

During the third quarter, Gilead Sciences posted total revenue of $5.6 billion, which was flat compared to the same period the year prior. The company's HCV business posted revenue of $674 million, down from $902 million during the prior-year quarter. Meanwhile, the company's HIV sales were $4.2 billion, a 13.5% year-over-year increase. Further, Gilead posted an operating loss of $1.5 billion as its expenses soared by 138% year over year. The company also posted a loss per share of $0.92, compared to its earnings per share (EPS) of $1.62 in the same quarter the year before. 

Amgen's performance during the third quarter wasn't particularly stellar either. The company's revenue of $5.7 billion decreased by 3% year over year, mostly as a result of competition from biosimilars for "key products" such as Neulasta. However, the company recorded a generally accepted accounting principles (GAAP) operating income of $2.5 billion, up 7% year over year, and a GAAP EPS of $3.27, up 14% year over year. 

Pipeline

Gilead Sciences boasts several potential medicines in its late-stage pipeline. Most notably, the company's product Filgotinib is being evaluated for several conditions, including psoriatic arthritis, rheumatoid arthritis, and Crohn's disease. This product could become highly successful if it passes the appropriate clinical and regulatory hurdles. 

Amgen recently completed its acquisition of psoriatic arthritis drug Otezla from Bristol-Myers Squibb. This product will bolster the company's pipeline as it is being evaluated for several other conditions including a rare inflammatory disorder called Behcet's disease. Amgen's late-stage pipeline includes other products such as Tezepelumab, a potential treatment for severe asthma. 

Which is the better buy?

Investors looking for stocks that will provide strong revenue growth will have to look elsewhere; these two pharma giants are unlikely to deliver that, at least for now.

However, I think Amgen wins this matchup for three reasons. First, Amgen is more attractively valued when taking into account future earnings growth: Amgen's price to earnings growth (PEG) is 2.07, while Gilead Sciences' PEG ratio is 5.27. Second, Amgen is a better dividend stock. The company offers a dividend yield of 2.66% and a payout ratio of 43.55%. With Amgen raising its quarterly dividends by 83.5% over the past five years, investors can expect more in the future. Gilead Sciences' juicy yield of 4% isn't backed by a conservative payout ratio, currently at 116%.

Lastly, Amgen's recent acquisition of Otezla will help boost the company's sales. This is why Amgen is, in my view, the better buy at the moment.