Pfizer (PFE 0.39%) and AbbVie (ABBV -0.03%) are both top-notch dividend stocks. At current levels, Pfizer's shares sport a ginormous yield of 3.99%. AbbVie, on the other hand, is the home of one of the industry's most generous payouts, with a forward-looking annualized yield of 5.11%.

Nonetheless, these two elite income stocks have been headed in drastically different directions over the past half-year. While AbbVie's shares have produced total returns on capital of 48% (when including dividends) over the last six months, Pfizer's stock has generated a far more modest return on capital of only 6% during the same period. 

The central issue behind this stark divergence is that Pfizer and AbbVie have taken markedly different approaches toward solving the same problem: namely, the loss of exclusivity for key revenue generators.

Pfizer, for its part, has decided that it needs to slim down by carving out its legacy products business in a planned merger with generic drug giant Mylan. AbbVie, by contrast, intends on bulking up through a merger with Botox maker Allergan. This mega-merger is designed to lower the importance of the biotech's top-selling anti-inflammatory medication Humira, as the drug starts to face biosimilar competition in earnest.   

Hundred dollar bills stuffed into a prescription drug bottle.

Image source: Getty Images.

Which of these two blue-chip dividend stocks is the better buy as things stand now? Let's check out how Pfizer and AbbVie stack up on several key fronts. 

The case for Pfizer

Pfizer's overarching goal is to become a growth-oriented biopharma with keen interests in immunology, oncology, rare diseases, and vaccines. By doing so, it expects to post high single-digit top-line growth for at least the next five years. That kind of revenue growth won't exactly wow anyone on Wall Street, but it is a welcome change from the company's anemic top-line growth over the past decade.

Truth be told, Pfizer's previous decade was really all about financial engineering (huge amounts of share buybacks), rather than solid revenue growth spurred by innovative new products. Pfizer's new lineup of growth products, which includes Ibrance, Xtandi, Eliquis, Xeljanz, and Vyndaqel, should be sufficient to effectively close this dark chapter in the company's history. 

But there is a major element of the unknown with Pfizer at the moment. It's no secret that the company is gearing up to pursue one or more bolt-on acquisitions in order to flesh out its pipeline and product portfolio. The good news is that the biopharma landscape is an especially target-rich environment right now. That being said, Pfizer has been one of the worst companies when it comes to creating value from mergers and acquisitions (M&As). So there's no telling how the company's next bout of M&A will ultimately pan out.  

The case for AbbVie

Even though Humira's sales have been rapidly declining overseas, AbbVie's top line has only continued to tick higher in recent quarters. In the fourth quarter of 2019, for instance, the biotech's revenue rose by a solid 5% compared with the same period a year ago. While Humira's U.S. sales did play a big part in this healthy year-over-year rise in revenue, the drugmaker's newer immunology medicines, Rinvoq and Skyrizi, and its blood cancer franchise consisting of Imbruvica and Venclexta loomed large as well. Skyrizi, in particular, absolutely crushed Wall Street's forecast for the three-month period, beating the consensus sales estimate by a whopping 51.3%. 

What's on tap for AbbVie for the remainder of the year? The seminal event will undoubtedly be AbbVie's forthcoming tie-up with Allergan, which is set to close before the end of the first quarter of 2020. This transformational deal will immediately benefit AbbVie's top line, diversify its product portfolio, and perhaps result in another sizable increase to the drugmaker's dividend.

Having said that, there's also a good chance that the combined AbbVie/Allergan entity will decide to put some of its noncore assets up for sale in the near future. That's not uncommon upon the closing of a biopharma mega-merger, but it does add another moving part to an already complex investing thesis.   

Which stock is the better buy?

All things considered, AbbVie appears to have a solid leg up on Pfizer. AbbVie sports a stronger near-term growth outlook, a richer dividend, and a broader array of high-growth products. Pfizer, on the other hand, still needs to round out its pipeline and product portfolios -- a process that could take a few years to complete.