AMGN

Amgen is a durable, cash-rich franchise rather than a bargain. FY2025 revenue rose 10.0% to $36.8B, extending a steady five-year climb from $26.0B (2021), and operating income grew 25.1% to $9.08B at a healthy 24.7% operating margin. The eye-catching 88.5% jump in net income to $7.71B (EPS $14.23, +88.2%) overstates the underlying acceleration, however: FY2024 net income was depressed at $4.09B, so 2025 is as much a recovery off a weak base as a step-change. Cash generation remains the real strength — operating cash flow of $9.96B (down 13.3%) less $1.86B capex leaves roughly $8.1B of free cash flow, comfortably covering the $5.12B dividend.

The balance sheet is where conviction caps out. Total debt of about $54.6B ($50.0B long-term plus $4.60B current) towers over just $8.66B of stockholders' equity, and a -$25.1B accumulated deficit reflects years of buybacks and acquisition-driven leverage. The headline 89.1% ROE is an artifact of that thin equity base, not a marker of pristine quality. The encouraging signal is capital discipline: buybacks were cut to $0 (from prior years) and long-term debt fell 11.6%, so management is clearly prioritizing deleveraging — but cash still dropped 23.8% to $9.13B and capex jumped 69.5%, so the deleveraging is real but not yet finished.