Have an order in to buy but have to admit that I have future concerns about Humira. While pharmaceuticals drive over half of the company’s profits, it is well diversified by drug and gets reliable cash flows from its consumer products and medical devices segments. See data and research on the full dividend aristocrats list. AbbVie Dividend Safety Score. AbbVie needs to develop new drugs that can eventually replace those sales or else it could see a steep revenue decline that could endanger the dividend. The company pays a juicy 5.9% dividend. The bigger risk to sales cyclicality is patent expirations of major drugs such as Humira. Simply Safe Dividends (SSD) awards a safety score of 50 out of 100 points, a grade that it calls “borderline safe.” SSD lowered ABBV’s safety score in 2019 from 61 (“safe”) to 50 (“borderline safe”) upon the announcement of AbbVie’s intent to acquire Allergan in an $80 billion deal. Sales of Humira accounted for over 60% of sales last year and are expected to represent nearly 50% of revenue by 2020 as well. Try Simply Safe Dividends FREE for 14 days. While the success rate is low, a successful drug can generate billions in profits that are protected for many years as a result of the intellectual property owned by the manufacturer. While management believes Humira sales can exceed $18 billion in 2020, some analysts see Humira revenue coming up at least 30% short of management’s ambitions. Contact Us, COPYRIGHT © 2017 Simply Safe Dividends LLC, AbbVie (ABBV): A Cheap Dividend Aristocrat Yielding Over 4%. Privacy Policy |
AbbVie’s free cash flow payout ratio over the last 12 months is a healthy 49%, which is roughly in line with the company’s payout ratios realized since it was spun off in 2013. As of today (2021-01-02), the Dividend Yield % of AbbVie is 4.41%.. During the past 11 years, the highest Trailing Annual Dividend Yield of AbbVie was 6.38%.The lowest was 0.85%.And the median was 3.37%.. AbbVie's Dividends per Share for the months ended in Sep. 2020 was $1.18.. During the past 12 months, AbbVie's average Dividends Per Share Growth Rate was 10.60% per year. Approximately 61% of the company’s revenue comes from sales of Humira, a drug that treats arthritis. AbbVie’s Dividend Growth score of 89 is excellent. The company last increased its dividend by 12% in October 2015 and is included on the dividend aristocrats list despite being spun off at the start of 2013, when it continued its dividend growth streak as an independent business. We analyzed all of Berkshire's dividend stocks inside. As patents expire, lower-cost competition emerges with knock-offs that quickly erode sales and margins. A score of 50 is average, 75 or higher is excellent, and 25 or lower is weak. The company’s success will hinge on the success of its drug pipeline and its ability to protect cash flows from Humira for as long as possible from biosimilar competitors. We will re-evaluate AbbVie’s dividend growth potential as that time draws nearer. The drugmaker owns the largest-selling drug in the world – Humira, which brought in $19.9 billion in revenue last year. Safe Dividend Stocks to Buy for Retirement: AbbVie (ABBV) Dividend Safety Score: 83 Dividend Yield: 3.8% Dividend Growth Streak: 4 years. While the market’s expectations seem to bake in a good amount of caution today, it’s still hard to get comfortable with AbbVie’s competitive landscape over the next five years. Dividend aristocrats are S&P 500 companies that have raised their dividends for 25+ years. With that said, AbbVie has increased its dividend by 42% since 2013 with increases each year. The stock looks set to be a big winner if it delivers on management’s 2020 goals (it trades for less than 7x implied 2020 earnings per share today), but we would ultimately prefer to stick with other blue chip dividend stocks that offer greater profit diversification and a slower pace of industry change. Business model and growth perspective. The seemingly low expectations attached to the stock are a reflection of investors’ concerns about AbbVie’s concentration in its Humira drug, which is set to experience competition in the U.S. market sometime over the next three to six years. The Dividend Growth Journey continues: $521.74 of dividend income, a nasty 50% dividend cut from ET, purchases of 6 companies adding $367 to my PADI., and the Dividend Safety Score improved to 61.3. The main wild card impacting future dividend growth beyond the next few years is the rise of Humira competition, which could come as early as 2019 or as late as 2022. Dividend Safety Score Our Safety Score answers the question, “Is the current dividend payment safe?” Of this total, roughly half of total sales would come from the company’s arthritis drug Humira, and another 13.5% would come from sales of leukemia drug Imbruvica. AbbVie was spun off by Abbott Laboratories in 2013. In AbbVie’s case, over half of its business is concentrated in one product. However, the trajectory that Humira’s revenue takes beyond the next few years, coupled with developments in AbbVie’s drug pipeline, will significantly impact the safety of the dividend from 2020 and beyond. These patents covers area such as manufacturing and formulation and do not begin to expire until 2022. Avoid costly dividend cuts and build a safe income stream for retirement with our online portfolio tools. Scores of 50 are average, 75 or higher is very good, and 25 or lower is considered weak. We analyze 25+ years of dividend data and 10+ years of fundamental data to understand the safety and growth prospects of a dividend. C grade indicates a low probability for a dividend cut and/or average safety risk. mounting political pressure to lower drug prices, our May 2019 note reviewing AbbVie's underperformance, Try Simply Safe Dividends FREE for 14 days. Clorox or Coca-Cola), it’s a risk in AbbVie’s market of branded pharmaceutical drugs and makes the stock less desirable for our Top 20 Dividend Stocks portfolio. It’s very hard for a complete outsider to forecast the timing and profitability of a company’s drug pipeline, so finding businesses with enough diversification helps reduce this risk. Johnson & Johnson is a great example. However, dividend investors must be willing to accept the higher uncertainty surrounding the company’s cash flows beyond 2020. Most dividend aristocrats possess the characters we desire when searching for safe dividend stocks. AbbVie Dividend Safety: 74% = 4/5 Above-Average. Given AbbVie’s strong outlook over the next few years for continued growth, we think its payout ratio is very healthy for the time being. Dividend Safety Scores range from 0 to 100. This dividend growth rate is below the 10.6% used in this analysis, thus providing a large margin of safety. Copyright Notice |
One of our stocks is down over 30% from where we bought it, and we know it is time to make a tough decision –... High dividend stocks are popular holdings in retirement portfolios. ABBV has a risk rating of 1.75 which classifies it as a Medium risk stock. Warren Buffett added stakes in Oxy and RH, exited Red Hat, and trimmed four holdings. Our Safety Score answers the question, “Is the current dividend payment safe?” We look at factors such as current and historical EPS and FCF payout ratios, debt levels, free cash flow generation, industry cyclicality, ROIC trends, and more. AbbVie’s management team expects the company to reach $37 billion in sales by 2020, which would represent more than a 60% increase from 2015’s revenue level. Also, some of my stock have no dividend scoring available anymore. The company received a Dividend Safety Score of 78, which is excellent and places it in the top quartile of dividend-paying stocks. Some of its other major drugs are Imbruvica, which treats leukemia, and Viekira, which treats hepatitis C. The company reported nearly $23 billion in sales last year and sells its drugs in over 170 countries. AbbVie Dividend Safety Score. Our Growth Score answers the question, “How fast is the dividend likely to grow?” It considers many of the same fundamental factors as the Safety Score but places more weight on growth-centric metrics like sales and earnings growth and payout ratios. Thanks, Jim. Pfizer’s COVID-19 Vaccine Shows Promise; Spin-off to Execute November 13 With Dividend Adjustment Next Quarter, Dominion’s Lower Dividend and New Business Mix Improve Safety Profile; We Plan to Hold Our Shares, AltaGas’s Falling Leverage Supports Dividend But Firm Will Evaluate Splitting Off Midstream Business, Altria’s Tobacco Business Remains Resilient But Longer-term Growth Uncertainties Linger, some analysts see competition emerging in 2019. As we mentioned earlier, pharma manufacturers generate excellent free cash flow when they successfully commercial a major drug. The stock price resulting from his analysis was about $100 per share, which is nearly 100% higher than AbbVie’s most recent closing price. ABBV's dividend yield, history, payout ratio, proprietary DARS™ rating & much more! Like all pharmaceutical companies, ABBV is faced with competition … Read more for all the details. The branded pharmaceuticals industry has extremely high barriers to entry and offers potential for juicy profit margins – AbbVie generated a 33% operating margin last year and targets a 50% margin by 2020. B grade indicates a very low probability for a dividend cut. June 26, 2019. AbbVie's management team expects the company to reach $37 billion in sales by 2020, which would represent more than a 60% increase The difference of just a few years could really make or break the stock’s performance over the coming years. However, the stock’s safe 4.1% dividend yield, relatively cheap forward earnings multiple of 11.1, and above-average earnings growth prospects over the next few years make it worth a closer look. For a stock with above-average growth prospects over the next few years, it appears to be very reasonably priced. Given AbbVie’s strong outlook over the … Investing in Real Estate Investment Trusts (REITs) can provide dividend investors with high yields, steadily growing payouts, nice... We have all been there. The Smart Dividend Safety Score shows early warning signs of a dividend cut, before it happens. A sustainable business model is essential to maintain future dividends and dividend … Boost Your Portfolio: Start a Free Trial! 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. Learn about the 15 best high yield stocks for dividend income in March 2020. We look at factors such as current and … Interpreting Dividend Safety Scores Dividend Safety Scores range from 0 to 100. Dividend Safety Scores range from 0 to 100. Pfizer's COVID-19 Vaccine Shows Promise; Spin-off to Execute November 13 With Dividend Adjustment Next Quarter. There are certainly more factors to consider with ABBV than most of the other dividend aristocrats. For example, during one week in October 2015, AbbVie’s stock fell by more than 10% after the FDA warned that AbbVie’s Viekira treatment caused liver injury to a small number of patients. Glad you found the article useful. I have been considering whether I should sell my holdings in ABBV and this article has given me a lot to consider. We believe AbbVie will continue recording at least a high-single dividend growth rate for the next few years. You can read our analysis of Johnson & Johnson by clicking here. If Humira’s revenue unexpectedly shrinks over the next five years, the balance sheet could become strained. We don’t have data that goes back to the last recession, but pharma companies are generally recession-resistant because consumers still need to treat their illnesses regardless of how the economy is doing. You just never know what might crop up any given week as it relates to new competition, unexpected developments in the drug pipeline, litigation, or other issues with existing treatments. Great review. ABBV’s stock trades at 11.1x forward earnings estimates and has a dividend yield of 4.1%. ABBV’s long-term dividend and fundamental data charts can all be seen by clicking here. Dividend Risk Score: A Retirement Suitability Score: A Last Dividend Increase: 10.3% Overview & Current Events AbbVie is a biotechnology company focused on developing and commercializing drugs for immunology, oncology and virology. 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