As an investor who loves the idea of companies returning more and more to their shareholders through various types of dividend-related events (such as increases and decreases of a company's annualized dividend and the announcement of stock buybacks) I wanted to highlight one company that has recently announced a 16.7% increase in its regular quarterly payout.

AbbVie Inc. (ABBV) – On Monday, October 20, AbbVie Inc., which now possesses a forward yield of 3.60% ($1.96/share annualized), announced a 16.7% or $0.07/share increase, from its prior payout of $0.42/share, for the upcoming quarter.

Headquartered in North Chicago, Illinois, AbbVie Inc. discovers, develops, manufactures, and sells pharmaceutical products worldwide. Its products include adult and pediatric pharmaceuticals, such as HUMIRA, a biologic therapy administered as a subcutaneous injection to treat autoimmune diseases; Synthroid to treat hypothyroidism; AndroGel, a daily testosterone replacement therapy; Creon, a pancreatic enzyme therapy for exocrine pancreatic insufficiency; Kaletra, a prescription anti-HIV-1 medicine used with other anti-HIV-1 medications to increase the chance of treatment response in people with HIV-1; Norvir, a protease inhibitor indicated in combination with other antiretroviral agents for the treatment of HIV-1 infection; and Lupron, a product for the palliative treatment of advanced prostate cancer.

Based on Monday’s closing price of $54.41/share, AbbVie now has a market capitalization of $4.17 billion, a P/E ratio of 21.01, and a forward yield of 3.60% ($1.96). Its trend behavior, although fairly negative in the near-term and slightly positive in the long-term (given the fact shares are trading 3.57% below their 20-DSMA, 2.56% below their 50-DSMA, and 4.07% above their 200-DSMA), should get a boost from its upcoming earnings which are due out on October 23. If the company can demonstrate a very solid quarter and surpass Wall Street’s expectations of $0.77/share in terms of EPS, I strongly believe we could see its shares reach a sustainable range of $56.50/share-to-$60.00/share by late-November.

Recent Update on Share Repurchases

In addition to the company’s dividend news that was announced on Monday, October 20, its board of directors also authorized a new $5 billion stock repurchase program. The authorization allows for the repurchase of up to $5 billion of the company's common stock, which is expected to be executed over the next several years. The stock repurchase authorization permits shares to be repurchased in open market or private transactions, has no time limit and may be discontinued at any time. 

Conclusion

For those of you who may be considering a position in AbbVie, I strongly recommend keeping a close eye on both the company's dividend and earnings behavior over the next 6-12 months as each catalyst should directly impact the long-term value of AbbVie’s shares.