AMGN, Amgen Inc.
Read top to bottom, the owner's questions in the order an owner asks them: what the business is, whether the record holds, whether it survives and is any good, and what you would be paying. New to the questions? Start with the Method.
The business in brief
read the 10-K →What this business is and what moves its needle, read from the numbers in its filings. The quantitative detail is in the sections below; the verdict is left to you.
- What it is
- Revenue is led by Other products (20%) and Prolia (12%), with 14 more lines behind.
- What moves the needle
- Volume against price, and shelf position. What decides it: whether it can raise prices without losing the customer, and whether the brand still commands its margin.
- Is it a good business?
- Return on capital has run in the teens (median 14%, above 15% in 5 of 10 years). Owner earnings agree: roughly 33% of revenue reaches owners as cash, consistently. Returns like these are solid but short of clear franchise economics; whether they hold is what the 10-K settles, not the multiple.
Every line here is arithmetic from the company's own filings, not a model's opinion, and each figure appears in full in the sections below.
Where the money comes from
read the 10-K →Revenue spreads across 7 lines, the largest Other products at 20%.
- Other products20%$7.3B
- Prolia12%$4.4B
- Repatha8%$3.0B
- Otezla6%$2.3B
- ENBREL6%$2.2B
- EVENITY6%$2.1B
- Other42%$15.5B
From the segment footnote of the company's own 10-K. Shares are of total revenue; the profit bar shows each segment's share of segment operating profit, before unallocated corporate costs.
The record, 2016–2025
realized figures from each filing, no estimates| 2016’16 | 2017’17 | 2018’18 | 2019’19 | 2020’20 | 2021’21 | 2022’22 | 2023’23 | 2024’24 | 2025’25 | TTMTTMMar 2026 | |
|---|---|---|---|---|---|---|---|---|---|---|---|
| RevenueRevenue | $23.0B | $22.8B | $23.7B | $23.4B | $25.4B | $26.0B | $26.3B | $28.2B | $33.4B | $36.8B | $37.2B |
| Gross marginGross mgn | 82% | 82% | 83% | 81% | 76% | 75% | 76% | 70% | 62% | 67% | 68% |
| Operating marginOp. mgn | 42.6% | 43.6% | 43.2% | 41.4% | 35.9% | 29.4% | 36.3% | 28.0% | 21.7% | 24.7% | 28.4% |
| Net incomeNet inc. | $7.7B | $2.0B | $8.4B | $7.8B | $7.3B | $5.9B | $6.6B | $6.7B | $4.1B | $7.7B | $7.8B |
| EPS (diluted)EPS | $10.24 | $2.69 | $12.62 | $12.88 | $12.31 | $10.28 | $12.11 | $12.49 | $7.56 | $14.23 | $14.34 |
| Owner earningsOwner earn. | $9.6B | $10.5B | $10.6B | $8.5B | $9.9B | $8.4B | $8.8B | $7.4B | $10.4B | $8.1B | $8.6B |
| ROICROIC | 13% | 9% | 23% | 25% | 23% | 21% | 24% | 11% | 12% | 14% | 17% |
| Cash & investmentsCash+inv | $38.1B | $41.7B | $6.9B | $6.0B | $6.3B | $8.0B | $7.6B | $10.9B | $12.0B | $9.1B | $34.5B |
| Net debt / (cash)Net debt | ($3.5B) | ($6.3B) | $27.0B | $23.9B | $26.7B | $25.3B | $31.3B | $53.7B | $48.1B | $45.5B | $22.9B |
| Dividends / shareDiv/sh | $3.98 | $4.58 | $5.27 | $5.76 | $6.36 | $7.00 | $7.76 | $8.47 | $8.93 | $9.45 | — |
| Book value / shareBVPS | $39.62 | $34.34 | $18.80 | $15.88 | $15.95 | $11.69 | $6.77 | $11.58 | $10.86 | $15.97 | $16.89 |
Owner’s Scorecard
Will it survive?
- No meaningful interest burdenLittle or no interest expense reported
Little or no interest expense reported, the business isn't leaning on lenders to operate.
- HighTotal debt $54.6B ÷ operating income $9.1B
Years of operating profit it would take to repay all debt. A first read, not a credit rating: it's gross debt (not netted against cash) over EBIT (not EBITDA), and a cyclical year distorts it.
- Debt, net of cash $7.6BModest net debtCash $9.1B + ST investments $37.9B − debt $54.6B
Netting $47.0B of cash and short-term investments against $54.6B of debt leaves $7.6B owed, about 0.8× a year's operating profit, versus the gross figure above. Net debt is the leverage figure that matters; the gross ratio above ignores the cash already set against it. Strategic or illiquid investments aren't counted here.
- Capital-hungryDSO 95 + DIO 189 − DPO 72 days
Days cash is tied up between paying suppliers and collecting from customers. Lower is better; a long cycle means growth itself eats cash.
Is it a good business?
- SolidNOPAT $7.8B ÷ invested capital $54.1B (debt + equity − cash)
The rate the business earns on the money tied up in it, Buffett's north star, because over time a stock tracks the ROIC beneath it. Above ~15% sustained hints at a moat; below ~8% the company may destroy value as it grows. Asset-light businesses (R&D expensed, little capital) read artificially high, pair this with Owner Earnings.
- Cash machineOwner Earnings $8.1B = operating cash $10.0B − capex $1.9B
What an owner could take out without starving the business. That's 22% of revenue. Treating stock comp as the real expense it is (less $494M of SBC) leaves $7.6B. Honest caveat: capex here blends maintenance and growth, so steady-state Owner Earnings may run higher (see capex vs. depreciation).
- Cash-backedCash from ops $10.0B ÷ net income $7.7B
How much of reported profit showed up as operating cash. Above 1× is reassuring; well below suggests earnings lean on accruals. One year is noisy, growth and working-capital swings distort it, and this is operating cash, not free cash. Watch the multi-year trend.
How is the cash used?
- Returns about halfDividends + buybacks $5.1B ÷ Owner Earnings $8.1B
Of $8.1B Owner Earnings, $5.1B (63%) went back to shareholders, $5.1B dividends, $0 buybacks. Returning most of it signals a mature cash machine; reinvesting most could mean a long runway, or empire-building. The split doesn't say which; the return earned on it (see ROIC) does.
- Investing or harvesting? 0.36×HarvestingCapex $1.9B ÷ depreciation $5.2B
Descriptive, not a grade. Above ~1× means investing faster than assets wear out (growth, or, sustained for years, today's earnings carrying less depreciation than tomorrow's will). Below means spending less than it's wearing out (efficiency, or a melting asset base). The ratio won't tell you which; the filings will.
Durability & moat, 2016–2025
A moat is a high return that doesn’t fade, reinvested at high returns. Here is what the record says, judgments, not another chart of the numbers.
- Profitable years 10 of 10
Never lost money over the record, the earnings stability Graham insisted on.
- Return on capital ≥ 15% 5 of 10 yrs
A moat shows up as a high return on invested capital that holds year after year, not one good vintage.
- Operating margin 43% (FY2016) → 25% (FY2025)
Margins slipped over the record, competition or costs are biting in.
- Reinvestment, incremental ROIC returns capital
The capital base barely grew: this business returns cash through dividends and buybacks rather than reinvesting. Judge it on the cash returned, not on compounding.
- Owner earnings growth −1%/yr
Free cash to owners shrank about 1% a year over the record.
- Worst year 2024 · 21.7% op. margin
Stayed profitable even in its hardest year, the resilience that survives recessions.
- Share count −3.6%/yr
The share count is shrinking, buybacks are quietly growing your slice of the business.
- Dividend record rising
Paid and raised the dividend across the record, the continuity Graham prized.
Solvent is not the same as cheap; growing is not the same as good. These are vital signs, not a verdict, the judgment is yours, and the filing is one click away.
How the cash was used, 2016–2025
Over the record, the business generated $101.4B of operating cash, and how management split it is, as Buffett insists, the job that matters most. Here it reads as a mature cash machine, most of what it earns goes straight back to owners.
- Reinvested$9.2B · 9%
- Dividends$39.9B · 39%
- Buybacks$46.6B · 46%
- Retained (debt / cash)$5.6B · 6%
It reinvested $9.2B (9%) back into the business and returned $86.5B (85%) to owners, $39.9B in dividends, $46.6B in buybacks. Total debt rose $22.7B across the span.
Buybacks are gross of stock issued to employees; net of that, the real return to owners is lower (see Management & pay). And the mix alone doesn't grade management, what matters is the return earned on the dollars reinvested (see incremental ROIC in the durability report).
Management & pay
read the proxy →Two questions Buffett actually asks about pay: is stock compensation, a real expense, whatever the income statement pretends, quietly large, and is the top wildly out of line with the floor. He's no populist about it; he just wants pay that's rational and earned, and comp committees that aren't lapdogs.
- CEO pay ratio160:1
What the chief earns for every dollar the median employee makes, per the 2026 proxy. A high ratio isn't proof of anything, some businesses are genuinely top-heavy in scarce skill, but a runaway figure is where Buffett starts asking whether the board is doing its job or just keeping the chair company.
- Stock-based compensation$494M
The slice of the business handed to employees in shares this year, 1% of revenue, equal to 5% of operating profit. Buffett's oldest accounting fight: this is compensation, compensation is an expense, real whether or not the headline earnings admit it. And note the trap, the cash-flow statement adds SBC back, so the operating cash, and the owner earnings drawn from it, are flattered by exactly this amount; counted as the cost it is, what an owner keeps is lower.
Graham’s defensive-investor test
3 of 6 metGraham gave the defensive investor seven numerical criteria in The Intelligent Investor. Here they are, run mechanically on the filings, his framework, not our verdict. Meeting them is a floor of safety, not a reason to buy; missing one is no veto, since many fine modern businesses fail his strictest liquidity tests by design. The worth is in seeing exactly where a company stands against the canon, every number sourced.
- Adequate size PassRevenue ≥ $2B · $36.8B
Big enough to weather a storm. Graham's 1972 floor was ~$100M of sales (≈ $700M today); we use a $2B revenue line as a conservative modern stand-in.
- Strong liquidity MissCurrent ratio ≥ 2× · 1.14×
Current assets at least twice current liabilities, near-term bills covered without touching the business. Strict by design: many cash-rich modern firms run leaner and miss it, holding their cushion in longer-dated securities.
- Conservative debt MissDebt ≤ working capital · $54.6B vs $3.6B WC
Graham's rule that borrowings not exceed net current assets. Capital-heavy and buyback-heavy firms routinely fail it, read it next to interest coverage, not alone.
- Earnings stability PassA profit every year (10-yr record) · no losses
Graham wanted earnings in each of the past ten years, the stability a defensive owner leans on.
- Dividend record PassUninterrupted dividends · paid every year (10)
An unbroken dividend was Graham's mark of durability. He wanted twenty years; the filings show about ten, and a single suspension breaks the streak. Non-payers, many fine modern compounders, fall outside his defensive net by design.
- Earnings growth NearEarnings +33% over the record · +2%
At least a third more earnings than a decade ago, averaging three years at each end. Net income (not per-share), so stock splits don't distort it, buybacks and dilution show up in the share-count line instead.
- Moderate price —P/E ≤ 15 and P/E × P/B ≤ 22.5 · decided by the price
Graham's valuation gate, the wall he kept between a sound business and a sound investment. Earnings are $14.23/share and book value $15.97/share. Enter a price in “What the price implies” just below for the P/E, P/B, and whether it clears. But this is the rule Buffett outgrew: there's no hard P/E law, and a wonderful business can deserve a far richer multiple if the thesis holds, treat it as the bargain-hunter's floor, not a verdict on the price.
Graham would be the first to say a checklist is a starting point, not an answer. These are his defensive, bargain-hunter's tests, the cigar-butt lens. Buffett and Munger grew past it, paying fair prices for wonderful businesses; that lens lives in the moat and owner-earnings work above, and both still matter. Clearing Graham’s tests earns a closer look; failing them earns harder questions, not a dismissal.
What the price implies
reverse-DCFA price is the one input we don't pull, you bring it. Type today's close (read it off any broker or quote site) and see the owner-earnings growth you'd have to believe to justify it, set beside what Amgen Inc. has actually delivered. Nothing is stored; the number stays in your browser.
Enter a price above to run it.
Graham capped the multiple at 15×; Buffett and Munger let that rule go, a wonderful business can deserve 50× if the thesis holds. Read it as the bargain-hunter's floor, not a ceiling on good sense.
The discount rate is your interest rate, what a dollar years from now is worth today, anchored to the long-term Treasury yield (~4–5% today, plus whatever premium you want for risk). Drag it toward the risk-free rate and watch how much growth the price suddenly “needs”: interest rates are gravity on valuations.
Owner earnings $8.6B on 544M diluted shares; net debt $22.9B. This is a lens, not a price target, it says what you'd have to believe, not what the company is worth, and it runs on one year of (noisy) owner earnings at assumptions you can see and change.
What the filing emphasizes, FY2025
read the 10-K →Each year a 10-K must name what could go wrong, in the company's own words. Here are the ones Graham and Buffett would stop on, each set against the figure from the same filings that bears on it, anchored to a period you can find in the record above. We point; the judgment is yours.
- Customer concentrationBusiness
Who the revenue leans on. When one buyer is a large slice of sales, that buyer holds the pricing power, and its troubles become the company's.
“F-16 For each of the years ended December 31, 2025, 2024 and 2023, we had product sales to three customers that individually accounted for more than 10% of total revenues.”
From the recordRevenue exposed (TTM)$37.2B - Pricing power & competitionMD&A
Whether the company sets its price or takes it. Durable pricing power is the surest mark of a moat; price competition is the surest mark there isn't one.
“Additionally, with public and private healthcare-provider focus, the industry continues to be subject to cost containment measures and significant pricing pressures, resulting in net price declines.”
From the recordOperating margin28.4% now (TTM), off a 43.6% peak (FY2017) - Supplier & input dependenceMD&A
A choke point upstream. A sole or limited supplier can dictate terms, and a single shortage can stop the line.
“We work to manage the risk associated with such sole suppliers by means of inventory management, relationship management and evaluation of alternative sources when feasible.”
From the recordGross-margin cushion (TTM)68% - Concentrated dependenceMD&A
What the whole business leans on, a product, a platform, a partner. Concentration cuts both ways, and the filing is where management has to admit it.
“Sales of our products depend on the availability and extent of coverage and reimbursement from third-party payers, including government healthcare programs and private insurance plans.”
From the recordOwner-earnings margin at stake (TTM)23% - Debt terms & refinancingBusiness
The fine print behind the debt. Covenants and near-term maturities decide who is really in control when a year goes badly.
“We were in compliance with all applicable covenants under these arrangements as of December 31, 2025.”
From the recordBalance sheet (TTM)$7.6B modest net debt · no real interest burden - Litigation & contingenciesRisk Factors
Claims an owner inherits. Most disclosure is boilerplate; this fires only on an actual matter, a named suit, a settlement, a contingency, a number.
“Reddy's and Alvotech Defendants have infringed or will infringe one or more claims of each of the Asserted Patents against the Dr.”
A judgment, not a number, weigh it against the filing yourself. - DilutionMD&A
Whether your slice quietly shrinks. New shares fund the company at the existing owner's expense.
“We may pay substantial amounts of cash, incur debt or issue equity securities to pay for acquisition activities, which could adversely affect our liquidity or result in dilution to our stockholders, and could adversely affect our credit ratings and cost of capital.”
From the recordDiluted share count−3.2%/yr (FY2016→TTM)
What changed, FY2025 vs FY2024
read the 10-K →Most of a 10-K is boilerplate carried over verbatim; the signal is in what's new. These lines appear this year and weren't there last, figure updates filtered out, so only the language shift remains.
- “Further, recent increases in tariffs imposed on certain goods imported into the United States, including inputs relevant to biopharmaceutical manufacturing, have raised our production costs to a limited degree in 2025, and, going forward, such tariffs, together with the imposition of tariffs from ag…”
- “Income taxes The increase in our effective tax rate for 2025 compared with 2024 was primarily due to a change in earnings mix, including the net unrealized gains on equity investments compared to net unrealized losses on equity investments in the prior year, partially offset by the prior-year deferr…”
- “Failure to obtain coverage and reimbursement for our products, a deterioration in their existing coverage and reimbursement, or a decline in the timeliness or certainty of payment by payers to hospitals and other providers, has negatively affected, and may further negatively affect, the ability or w…”
- “Compensation, Benefits and Development Our approach to employee compensation and benefits is designed to deliver cash, equity and benefit programs that are competitive with those offered by leading companies in the biotechnology and pharmaceutical industries, and to attract, motivate and retain tale…”
- “Income taxes The increase in our effective tax rate for 2025 compared with 2024 was primarily due to a change in earnings mix, including the net unrealized gains on equity investments compared to net unrealized losses on equity investments in the prior year, partially offset by the prior-year deferr…”
Classic text analysis over the filing itself, no model wrote a word of this, and every quote is the company's own.
Peers, Pharma
The same industry, side by side on owner economics, compare, don't rank by a single number.● marks best in the group.
| Company | Revenue | Gross margin | Op. margin | ROIC | Owner earn. margin |
|---|---|---|---|---|---|
| PFEPfizer Inc. | $62.6B | 74% | 16.3% | 7% | 15% |
| ABBVAbbvie Inc. | $61.2B | 70% | 24.6% | 17% | 29% |
| BMYBristol-myers Squibb Company | $48.2B | 71% | 19.4% | 13% | 27% |
| ABTAbbott Laboratories | $44.3B | 56% | 18.2% | 11% | 17% |
| AMGNAmgen Inc. | $36.8B | 67% | 24.7% | 14% | 22% |
| GILDGilead Sciences, Inc. | $29.4B | 79% | 34.0% | 17% | 32% |
| REGNRegeneron Pharmaceuticals, Inc. | $14.3B | 97% | 24.9% | 10% | 28% |
| VRTXVertex Pharmaceuticals Inc / MA | $12.0B | 86% | 34.8% | 26% | 27% |