With technology stocks retreating amid concerns about lofty AI valuations and massive infrastructure spending, investors may want to consider defensive healthcare stocks that are showing impressive relative strength.
Notably, AbbVie ABBV) and Eli Lilly LLY) stocks have hit fresh 52-week highs after posting strong Q3 results last week , highlighting investors' appetite for established healthcare companies with resilient demand, strong earnings potential, and attractive long-term growth prospects.
Both stocks are up more than 25% in 2026 and have outperformed the broader market with returns of more than 100% in the last three years.
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AbbVie's Strong Growth & Rising Dividend
Hitting a fresh 52-week high of $302 a share on Thursday, AbbVie’s ascent has been supported by strong demand for its blockbuster immunology treatments Skyrizi and Rinvoq.
AbbVie's Q3 revenue climbed 10% year over year to $17.4 billion, with adjusted earnings more than doubling to $3.82 per share. Management also raised its full-year adjusted EPS outlook to a range of $13.95-$13.99, which would reflect more than 39% growth.
Adding to its defensive appeal, AbbVie recently announced a 5.2% dividend increase for 2027 to a quarterly payout of $1.82 per share, reinforcing its commitment to shareholder returns with a dividend yield comfortably above 2%.
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Eli Lilly's Explosive Obesity Drug Growth
Eli Lilly has emerged as one of the medical sector's strongest growth stories, with LLY shares also hitting a 52-week peak in today’s trading session of $1,453 a share.
Demand for blockbuster diabetes and obesity treatments Mounjaro and Zepbound continues to fuel exceptional growth. In Q3, revenue surged 39% YoY to $24.4 billion, prompting management to raise its full-year sales guidance to $91-$92 billion, reflecting 40% growth from $65.18 billion in fiscal 2025.
Although Lilly trades at a premium to many of its healthcare peers at 40X forward earnings, its expanding obesity treatment franchise and robust drug pipeline provide compelling long-term growth catalysts that are less directly tied to economic cycles.
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Bottom Line
With technology volatility intensifying, AbbVie and Eli Lilly offer attractive ways to diversify into healthcare while maintaining exposure to long-term growth.
ABBV stands out for its dividend income and defensive characteristics, while LLY offers stronger growth potential, albeit with greater valuation risk.
Although they warrant some caution near 52-week highs, both stocks could be worthwhile portfolio additions for investors seeking greater stability outside the technology sector.
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This article originally published on Zacks Investment Research (zacks.com).