Is AbbVie A Good Dividend Stock To Own In 2021?

Illinois-based pharmaceutical giant AbbVie Inc. (ABBV - Get Rating) has increased its dividend payout for nearly 49 consecutive years. The company’s dividend has grown at a CAGR of 22.8% over the past three years. Moreover, strong sales of its Humira drug have helped the stock gain 15% over the past six months.

ABBV’s current quarterly dividend cumulates to an annual dividend of $5.20, which translates into a dividend yield of 4.78%. This compares to the company’s four-year average yield of 4.34%. Over the past six years, ABBV has issued more in  dividends (as measured in absolute U.S. dollars) than 97.2% of U.S. stocks that pay dividends.

The company’s transformative Allergan acquisition along with its broad portfolio of diversified growth assets have helped the stock to gain 25.5% over the past year. As ABBV’s other drugs — such as cancer drugs Imbruvica and Venclexta — continue to boost revenue growth, ABBV is expected to generate more than sufficient cash flow to continue its dividend growth.

We think the following factors could help ABBV maintain its dividend growth and deliver solid total returns this year:

NYSE: ABBV | AbbVie Inc.  News, Ratings, and Charts

ABBV – Abbvie Inc.’s (ABBV) dividend payout has increased steadily over a long period as its drugs generated big returns for the company. And we think ABBV’s recent acquisitions and investments in drug development should turbocharge its ability to grow its pay-outs substantially in the coming months. So, let’s review what makes it one of the best high-yield stocks to bet on now.

Acquisition of Cypris Medical

ABBV’s Allergan Aesthetics has entered into a warrant agreement to exercise an option to acquire Cypris Medical, including the company’s Xact device. This should create a steady cash flow for the company.

Sustainable Growth Opportunities

The European Commission recently approved ABBV’s Rinvoq drug for the treatment of adults with active psoriatic arthritis, which could lead to significant future gains for the company.  In fact, its top-selling Humira drug generated global net revenues of $5.15 billion in the last reported quarter, increasing 4.8% year-over-year. As ABBV  continues to expand its portfolio of drugs and receives approval for others, it is expected to generate significant cash flow. This should not only support the company’s generous dividends but also allow the company to grab growth opportunities.

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