A good example is Gilead (NASDAQ:GILD). No, Pfizer isn't a Dividend Aristocrat like AbbVie is. As of November 15th, there was short interest totalling 14,000,000 shares, an increase of 9.0% from the October 31st total of 12,840,000 shares. I’ve seen little evidence indicating that it will be able to replace its current profits after the patent cliff arrives. For comparison’s sake, AbbVie’s entire business generated $34 billion of revenue last year, and produced $8.4 billion of net income. The world's best-selling drug in 2018, autoimmune drug Humira is now set to become a serious albatross for AbbVie, as patent expirations and biosimilar competition outside the U.S. chip away at its revenue. There are typically 4 dividends per year (excluding specials), and the dividend cover is approximately 2.1. Not sure where to start? Please help us personalize your experience. On April 23, Invesco announced it would be cutting its dividend by 50%, from 31 cents per share to 15.5 … A company that pays out close to half its earnings as dividends and retains the other half of earnings has ample room to grow its business and pay out more dividends in the future. A score of 50 is average, 75 or higher is excellent, and 25 or lower is weak. Slice off most of Humira’s sales and the company’s results will drop massively. Learn more about Dividend Safety Scores here. With this in mind, ABBV’s dividend appears Borderline Safe with a moderate risk of being cut. If a stock’s yield is above or near the market average then it will be rated higher within this parameter. * Dividend.com does not provide financial advice and does not issue recommendations or offers to buy stock or sell any security. Portfolio management news, reports, video and more. AbbVie paid out $6.5 billion of dividends last year. Ian Bezek has written more than 1,000 articles for InvestorPlace.com and Seeking Alpha. AbbVie’s upcoming dividend is US$1.18 a share, following on from the last 12 months, when the company distributed a total of US$4.72 per share to shareholders. Humira’s annual sales grew from an already tremendous $8 billion in 2011 all the way to $20 billion in 2018. AbbVie paid out $6.5 billion of dividends last year. Municipal bonds news, reports, video and more. Particularly in the post-coronavirus world, when companies are slashing their dividends left and right, AbbVie can easily justify a similar move. Consecutive Years of Dividend Increase is the number of years in a row in which there has been at least one payout increase and no payout decreases. The real question is what its results will look like in 2023 and 2024 as its revenue starts to plunge during the beginning of the post-Humira era. If a stock is valued near, or slightly below the market average, research has shown that the market expects the stock’s dividend to increase. I suspect that if AbbVie paid a similarly modest yield, its stock would be much less popular with individual investors. In the past, the owners of its shares fixated on its past results rather than thinking about its future. Fwd Payout Ratio is used to examine if a company’s earnings can support the current dividend payment amount. AbbVie began trading as an independent company in 2013, after it was spun off from fellow pharmaceutical Dividend Aristocrat, Abbott Laboratories (ABT). A stock’s Earnings Growth rating evaluates a company’s expected. Abbott is a member of the S&P 500 Dividend Aristocrats Index, which tracks companies that have annually increased their dividend for 25 consecutive years. ABBV's growth rate in terms of the amount of dividends it returns to shareholders is greater than 91.23% of its fellow dividend stocks in the Healthcare sector. Helpful articles on different dividend investing options and how to best save, invest, and spend your hard-earned money. Sure, Allergan will help to some extent. Calculating the last year’s worth of payments shows that AbbVie has a trailing yield of 5.9% on the current share price of $79.75. AbbVie simply can’t be judged based on its 2019 earnings and dividend. All rights reserved. U.S. revenue should be safe until around 2023, but AbbVie is staring down a scary patent cliff given that Humira accounted for 57% of the company's total … Even after its huge rally over the past month, AbbVie’s stock still pays out 5.2%. Sometimes a company offers a high dividend simply because the market is underestimating its prospects. Dividend Safety Scores range from 0 to 100. ABBV stock qualifies as a Dividend Aristocrat, as its former parent company Abbott was on the list at the time of the spin-off. 1125 N. Charles St, Baltimore, MD 21201. Dividend stocks making payouts in the next 10 business days and have a history of rebounding in price shortly thereater. AbbVie Will Be in Big Trouble When Its Patent Cliff Arrives, Louis Navellier and the InvestorPlace Research Staff, Avoid Overvalued Airbnb Stock Until After The Honeymoon, Matt McCall and the InvestorPlace Research Staff, What Did the Stock Market Do Today? To see all exchange delays and terms of use, please see disclaimer. AbbVie (NASDAQ:ABBV) is in the midst of a transition. Critical Facts You Need to Know About Preferred Stocks, Earn More With Dividend Stocks Than With Annuities for Your Retirement. Enhance retirement outcomes with helpful tactics. C grade indicates a low probability for a dividend cut and/or average safety risk. AbbVie began life about a decade ago when it was spun off from health care and medical devices company Abbott (NYSE:ABT). ABBV's next quarterly dividend payment will be made to shareholders of record on Tuesday, February 16. This rating is reserved for companies with strong balance sheets and/or excellent dividend histories. Today, AbbVie focuses on one main business segment—pharmaceuticals. Now, however, AbbVie must adapt quickly or ABBV stock will be in big trouble. While the patent protection will result in a loss of revenue for ABBV, they have been working hard in R&D to build products that can help offset the loss of revenue. Many healthcare companies tend to have a dividend yield of 2%-3%. AbbVie spent more than $60 billion on Allergan to try to fill its upcoming Humira revenue hole. While there are always exceptions, in general, drug companies shouldn’t pay a high dividend; yields of 5% and up are dangerous.
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