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AbbVie has done well to position itself for the future, and the stock price should remain relatively strong through the coronavirus crisis, especially considering its price-to-earnings ratio of 15.1 versus the industry average P/E of 29.7. Try Simply Safe Dividends FREE for 14 days. Those with strong balance sheets, balanced drug portfolios, and a good track record of delivering safe and growing dividends. AbbVie’s free cash flow has nearly doubled over the past two years, from $6.5 billion in 2016 to $12.8 billion. AbbVie gave its payout a mighty boost just ahead of a major trial failure. Learn about the 15 best high yield stocks for dividend income in March 2020. Maybe now's a good time to look under the hood. It's been a brutal year for dividend aristocrat AbbVie (ABBV), which has seen its share price plunge more than 30% from its all-time high. In fact, I think AbbVie is a buy at these levels, with an upside expected shortly after the Allergan deal closes. App Economy Insights Dec. 30, 2020 10:45 AM ET. The new AbbVie is expected to generate 40% of revenue from Humira and 60% from growth opportunities made possible by the integration of the two companies. It already faces biosimilar competition in Europe, and will lose U.S. patent protection in 2023. The multipurpose drug Humira has been the main engine behind this growth; in fact, it's now the top-selling drug in the world. AbbVie's dividend yield is 2.8%, which is relatively similar to those of many of its drug-making peers and considerably above the 2% average among stocks in the S&P 500 index. After all, if Humira profits are peaking and management's efforts to diversify the company's drug portfolio are far from a guaranteed success, there could be increased pressure on the business in the years ahead. Johnson & Johnson (JNJ) and Merck (MRK) are two examples. Which category does AbbVie fall into, and is the dividend safe? When you rely on your dividends for monthly expenses, this is a very important question. Allergan also has a big presence in the growing aesthetics sector thanks to its ownership of Botox and CoolSculpting. But it’s appealing only if that dividend is safe. Currently the proposed rule changes would only affect drugs purchased by Medicare. AbbVie's management expects several financial benefits from the merger, including an immediate 10% increase to earnings per share over the first full year of the combination, cost reductions of at least $2 billion by year three, and operating cash flow estimated at $19 billion. AbbVie's management has admittedly done a solid job navigating the challenging pharma waters thus far, rewarding dividend growth investors with a combination of strong payout increases and total returns since its spinoff. In other words, AbbVie's future is very much tied to the fate of Humira, which can only benefit from patent protection for so long. AbbVie Inc.'s (NYSE: ABBV) treated shareholders to some hefty dividend bumps since its inception five years ago, but a 35% raise announced in February was the biggest yet. Regarding the acquisition, AbbVie CEO Richard Gonzalez said: You look at [the drugs] Skyrizi, Rinvoq, Venclexta, Imbruvica. AbbVie was spun off from Abbott Laboratories (ABT), its former parent company which is also a Dividend Aristocrat. Regarding dividend safety, AbbVie said in a company announcement regarding the Allergan acquisition: "The combined company will produce robust cash flow which will support continued growth of our dividend, further investment in our pipeline, and reduction of debt. 25'' list, signifying a stock with above-average ''DividendRank'' statistics … H & R Block Inc (NYSE: HRB ): This tax preparation company's dividend … How Safe Is AbbVie, Inc.'s Dividend Now? ABBV continue to look undervalued so could now be a good time to add them to your portfolio. Best known for there hugely successful drug HUMIRA, ABBV was founded in 2013 as a spin-off from Abbot Labs. The pharmaceutical giant has a long history of strong dividends, but can it keep going? Pharmaceutical giant AbbVie (ABBV, $92.38) is about as stalwart a dividend grower as they come. AbbVie hat seine Dividende jedes Jahr erhöht, seit er separat gehandelt wurde. David and Tom just revealed what they believe are the ten best stocks for investors to buy right now... and Allergan wasn't one of them! A larger than expected price cut on Humira in the EU will likely reduce both management guidance and analyst growth expectations a bit. Das Wachstum ist ebenfalls gesund, einschließlich der jüngsten Steigerung der AbbVie-Auszahlung um … Prior to the Allergan acquisition, that figure is expected to decline to $12.4 billion in 2019. Strong growth came from Imbruvica, which grossed sales of $4.7 billion, up 30% from the previous year. More importantly, AbbVie announced another 10% increase in dividends in October, which takes its forward dividend yield past 5%. This article will look at a few key metrics along with future growth prospects to determine ABBV dividend safety. However, it’s still hard to get comfortable with AbbVie… Guidance for 2020 reflects growth of 8.1% at the midpoint, with an EPS forecast between $9.61 and $9.71. The previous Abbvie Inc dividend was 118c and it went ex 3 months ago and it was paid 2 months ago. Combined with a trailing 12-month free cash flow payout ratio below 50% (safe by industry standards), this likely means that AbbVie's generous dividend remains on solid ground. Dominion made its dividend cut official this week, reducing its fourth-quarter payout by 33% after closing a deal to sell its natural... AltaGas's Falling Leverage Supports Dividend But Firm Will Evaluate Splitting Off Midstream Business. AbbVie Inc (Symbol: ABBV) has been named to the Dividend Channel ''S.A.F.E. We ran the stock through Simply Safe Dividends, and as we go to press, its Dividend Safety Score is 50. Dividend Safety Scores range from 0 to 100. Dividend yield: 5.6%. AbbVie gave its payout a mighty boost just ahead of a major trial failure. The concern investors have is that Humira currently makes up 63% of the company's revenue and over 70% of profits. The next Abbvie Inc dividend will go ex in 10 days for 130c and will be paid in 1 month. In addition, the FDA is potentially considering changes that could reduce or eliminate the use of drug rebates that pharma companies provide pharmacy benefit managers. Technically AbbVie has only existed since 2013 when it was spun off by Abbott Labs. Management expects to see revenue growth for 2020 approaching 8% on an operational basis. AbbVie also reported adjusted earnings per share of $8.94, reflecting 13% year-over-year growth and beating the company's initial guidance midpoint by $0.24. Show full articles without "Continue Reading" button for {0} hours. Such elective procedures are being canceled or postponed during the coronavirus crisis, but the aesthetics sector should bounce back after the pandemic has passed. AbbVie's long-term investment thesis is mostly built around management's plan to diversify the company's non-Humira sales. AbbVie’s Dividend Safety Relative to Free Cash Flow Zusammen haben sie eine 45-jährige Erfolgsgeschichte mit steigenden Auszahlungen zusammengestellt. I’m not fond of this rule, … Find the latest dividend history for AbbVie Inc. Common Stock (ABBV) at Nasdaq.com. Let's take a look at why the market has been so bearish on AbbVie and whether this high-yield stock could be a reasonable dividend growth investment or a value trap to avoid. Management even announced an 11.5% dividend increase when AbbVie reported earnings last week. 2 Top Picks - Safe High Dividend Biotechs For 2021. Not long after announcing the payout boost and another $10 billion stock repurchase program, a high-profile clinical trial failure knocked AbbVie's stock down a few pegs.. At recent prices, AbbVie shares offer a nice 4% yield. Anne Burdakin owns shares of AbbVie. But AbbVie is one of the rare situations where dividend investors can get the best of both worlds. Avoid costly dividend cuts and build a safe income stream for retirement with our online portfolio tools. Learn more about Dividend Safety Scores here. AbbVie is a global pharmaceutical giant. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*. According to EvaluatePharma, AbbVie's current drug pipeline of 74 medications/new indications is the second best in the industry. The company has consistently increased its dividends … Try Simply Safe Dividends FREE for 14 days. - Intelligent Income by Simply Safe Dividends Is AbbVie's Dividend Safe? I think the dividend is safe for the short term even without the Allergan deal, but its conclusion will secure the payout for the long run. The deal is expected to close in May. At the very least, such severe price declines can signal that a company's long-term thesis is broken. If those are too high, might that not force management to cut the dividend in order to retain more cash to deleverage and diversify and the company's drug portfolio? I think the last numbers I saw showed it was growing about 70%. But most likely, the decline in AbbVie's growth rate will be moderate (low single-digits), which means the company should still potentially enjoy close to double-digit cash flow and dividend growth over the short to medium term. Today, AbbVie focuses on one main business segment—pharmaceuticals. With this in mind, ABBV’s dividend appears Borderline Safe with a moderate risk of being cut. Let's take a closer look at the factors that continue supporting AbbVie's payout. However, just because a dividend isn't at strong risk of being cut doesn't necessarily mean a high-yield stock is worth buying. In den Forbes Global 2000 der weltweit größte… Recent market volatility has unfairly whipsawed many stocks that are usually considered steady eddies, and the effects have been even stronger for specific sectors and speculative stocks. AbbVie's dividend yield is 2.8%, which is relatively similar to those of many of its drug-making peers and considerably above the 2% average among stocks in the S&P 500 index. But AbbVie has more going for it. AbbVie reported strong 2019 year-end results on Feb. 7. Besides the overhang of Humira's growth trajectory in international markets, adding to the selling pressure was news that the FDA just approved Novartis' (NVS) biosimilar Myrimoz for sale in the U.S. There are some pros and cons related to AbbVie’s dividend safety. Out of Ignorance Dec. 30, 2020 6:12 AM ET. Any part of your body can be mistakenly attacked, resulting in conditions like lupus, Crohn's disease, rheumatoid arthritis, chronic plaque psoriasis, and other illnesses. AbbVie Inc.'s (NYSE:ABBV) treated shareholders to some hefty dividend bumps since its inception five years ago, but a 35% raise announced in February was the biggest yet. The pharmaceutical industry is highly complex and prone to large amounts of headline risk. Dividend Summary. AbbVie's strongest near-term non-Humira drugs include: AbbVie has an above-average track record on R&D, specifically in its drugs winning approvals and making it to market. So what do all of these developments mean for AbbVie's dividend safety? Those all have significant growth opportunities ahead of them on the AbbVie side. AbbVie stock has sported an attractive dividend yield since its 2012 spinoff from Abbott. Market value: $124.0 billion. Safe meaning it is unlikely that the dividend will be reduced. Microsoft may earn an Affiliate Commission if you purchase something through recommended links in this article. Safe Dividend Stock #2: AbbVie Inc. (ABBV) AbbVie is a cutting-edge company specializing in small molecule drugs. As a result, the stock's yield is now at a record high of 5.2%, and shares trade at just 9.9 times forward earnings. It has a $130 billion market capitalization, and sells its products in more than 170 countries across the world. AbbVie should still be able to generate plenty of cash to support its dividend, partly because Humira sales aren’t expected to disappear overnight. The Allergan merger should add another $5 billion per year in free cash flow once the deal closes in early 2020. AbbVie’s Dividend Safety Relative to Free Cash Flow As a result, the stock's yield is now at a record high of 5.2%, and shares trade at just 9.9 times forward earnings. Whenever a dividend stock's price crashes this severely, income investors naturally want to know whether it could be a great buying opportunity or is the market's way of warning that the payout may no longer be safe. Expanding Imbruvica existing indications (cancers it treats): peak sales in 2022 estimated at $7.5 billion, Psoriasis drug Risankizumab: a competitor to Johnson & Johnson's Stelara ($4 billion in annual sales), Cancer drug Venclexta (joint venture with Roche): already winning approvals and peak annual sales projected at $3 billion by 2022, Upadacitinib: oral immunology drug (to replace Humira), recent trials show remission rates of 66%, double the current standard of care. I think Abbvie will deliver very nice returns for investors. Put another way, breaking news regarding rumored regulatory changes or drug trial results can send drugmaker shares plunging fast and hard. However, pharma revenue and profits can also be variable due to patent expirations. Pfizer announced on Monday its COVID-19 vaccine candidate was found to be more than 90% effective, and no serious safety concerns had... Dominion's Lower Dividend and New Business Mix Improve Safety Profile; We Plan to Hold Our Shares. Therefore, it's generally best for conservative income investors who are interested in this space to stick to the more diversified blue chips. The company pays a juicy 5.9% dividend. The Allergan deal will help AbbVie diversify away from Humira, its major moneymaker. Courtesy AbbVie. The AbbVie dividend has been paid continuously since 1924 and increased for 48 consecutive years; qualifying the company as a Dividend Aristocrat. It's been a brutal year for dividend aristocrat AbbVie (ABBV), which has seen its share price plunge more than 30% from its all-time high. Der weltweite Umsatz betrug 2018 32,7 Milliarden US-Dollar. Net revenue of $33.3 billion increased 9.9% operationally year over year. 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