We cover dividend stocks often at 24/7, as they provide investors with much better income streams than U.S. government and corporate bonds have over the past five years. The usual suspects often are written about as great buy-and-hold ideas, like telecommunications, utilities and real estate investment trusts (REITs), because the dividends are dependable. However, in many cases, some of those stocks don’t have big upside potential and are considered more of a bond proxy to many investors, and they can be hurt by rising interest rates.
One area often ignored by growth and income investors is biotechnology, as the volatility in the sector, especially with companies that have only one or two income-producing therapies or medications, sometimes is deemed too risky. However, one major reason for growth stock investors with a solid risk tolerance to look at the sector now as it has been absolutely wasted this year.
In a year in which the major indexes are up over 20%, the VanEck Vectors Biotech ETF (NASDAQ: BBH) is down over 15%, and some of the major players in the industry have retreated much more than that. We screened out 24/7 Wall St. biotech research universe looking for stocks rated Buy that also paid a dividend. Five top companies look like awesome buys now. It is important to remember, though, that no single analyst report should be used as a sole basis for any buying or selling decision.
AbbVie
This is one of the top pharmaceutical stock picks across Wall Street. AbbVie Inc. (NYSE: ABBV) is a global, research-based biopharmaceutical company formed in 2013 following separation from Abbott Laboratories. The company develops and markets drugs in areas such as immunology, virology, renal disease, dyslipidemia and neuroscience.
One of the biggest concerns with AbbVie is what might happen eventually with anti-inflammatory therapy Humira, which has some of the largest sales for a drug ever recorded. The company was concerned, so in June of 2019 it announced that it has agreed to pay $63 billion for rival drugmaker Allergan, the latest merger in an industry in which some of the biggest companies have been willing to pay a high price to resolve questions about their future growth. The purchase officially closed in May of last year.
AbbVie may be nearing the limits of how far it can boost Humira’s price as cheaper competitors come to market, a problem Allergan is already grappling with as more alternatives to Botox emerge.
Shareholders receive a 4.63% dividend. Truist Securities has a $135 price objective on AbbVie stock. The consensus price target is $132.01, and shares closed trading on Wednesday at $121.87.
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